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  Latest
Make Money in Forex by Avoiding These Psychological Risks May 24, 2022
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Monitor The Forex Market : The 24 Hours Cycle

Mira Team by Mira Team
July 28, 2020
in Article
Reading Time: 2 mins read
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Monitoring what is happening throughout the day in the Forex market is much more difficult than monitoring what is happening in the U.S. stock market, for instance, because the Forex market never sleeps. There is no opening or closing bell. Trading activity simply follows the sun as it moves from one financial center to the next around the globe. The trick is knowing which financial center is likely to be most active at different times of the day, because knowing who is awake and trading in the currency market at any given point in time will give you added insight into why a particular currency pair is moving the way it is.

Technically, the trading day starts in New Zealand and Australia. Shortly after that, the Japanese markets come online, followed by Singapore, Hong Kong, and the other Asian markets. Next, Europe starts to join in the fun as Switzerland, Germany, and he United Kingdom wake up and get to work. Lastly, after the Asian markets have wound up their trading day, the United States jumps into action. And then, of course, the entire process starts all over again.

Table 3-3 gives a breakdown of when the major markets open each trading day; all times are in Greenwich mean time (GMT).

Of course, when daylight saving rolls around, you will need to make the necessary adjustments by shifting Sydney, Zurich, London and New York ahead one hour, but this should give you a good idea of which markets are most active during different parts of the trading day.

Although currency trading takes place in financial centers around the world, the bulk of the trading is clustered in a few cities. According to the Bank for International Settlements (BIS),8 more than half of all Forex transactions take place in either the United Kingdom or the United States. Here’s the breakdown:

  • London: 36.7 percent
  • New York: 18 percent
  • Tokyo: 6 percent
  • Singapore: 5 percent
  • Zurich: 5 percent
  • Hong Kong: 5 percent
  • Sydney: 4 percent

So what does all this mean? What should we be watching? Here are a few things:

  • The London and New York markets are both open between 1:00 p.m. and 4:00 p.m. GMT, which means that there is going to be a lot of liquidity in the market during that period.
  • The transition between the close of the trading day in New York and the opening of the trading day in Tokyo is a relatively quiet time in the market.
  • Liquidity in the euro picks up when the European markets open, and liquidity in the U.S. dollar picks up when the U.S. market opens.

The most important thing for you to take from all of this is the fact that currency pairs trade differently depending on the time of day. So as you get started, try to trade at the same time each day so that you can get used to how the market reacts during those trading hours.

Tags: Basic
ⓘ Some contents provide links to third-party news and current events as a convenience to you. We have not reviewed and don't endorse the contents of these sites. Please always do your own research. Mira FX does not endorse any companies, products or services which are represented on this article. Mira FX is not liable for any damage or loss, including but not limited to, any loss of investment, which may be based either directly orindirectly on the use of or reliance on such information. Before deciding whether or not to take part in foreign exchange or financial markets or any other type of financial instrument, please carefully consider your investment objectives, level of experience and risk appetite.

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