Trading Forex Markets

The foreign exchange system is spread across the globe. The three major markets are London, New York, and Tokyo. In trading Forex markets does one give the trader an advantage over the others? Most commonly in trading Forex markets the issue for the trader is where he lives and the hours that he wants to work. Profitable Forex trading may have to do with working the hours of a given market. In that case, when are the markets open?

Forex Market Business Hours

All markets are open during daytime business hours in their city. London is on Greenwich Mean Time. New York is six hours farther to the West and Tokyo is fifteen hours to the East. Thus when the London market is open at 9 am it is 3 am in New York and midnight in Tokyo. Trading Forex markets around the clock is possible if traders work in shifts but not so for the individual trader. Most traders tend to trade during working hours in their part of the world. However, news that is pertinent to the Euro, Swiss franc, or British Pound as well as the South African dollar, will typically break during London hours. News related to the US dollar, Canadian dollar, Mexican peso, Brazilian real and all other Western Hemisphere currencies will break during the New York work day. And, news relevant to the Australian dollar, Yen, Singapore or Taiwanese dollar, Yuan or Indian Rupee is likely to break during daytime hours in Tokyo. If the news is important to you in trading Forex markets then you will either need to pick a market and then the currencies you trade or pick your currencies and adjust your work hours. If you like to apply technical analysis of gaps in Forex trading in search of profits being up and working when a market opens will be necessary.

Day Trading During the Night

Trading Forex markets is done via an internet connection and a New York based day trader can certainly get up early for the London market or arise late in the day and stay up late for the Tokyo market. In all cases online currency trading is done via a trade station, technical analysis software is the same, and in each case the trader will need to analyze the fundamentals that drive the market. An English speaker will have no problem with English language news reports pertinent to the London or New York market. However, news that breaks in Japanese may be a problem for the English speaker.  The world of Forex trading is fast paced. An announcement by the Japanese central bank may not be available in English for a period of time. During that time the market may react significantly and the English based trader will have missed out. Worse, if the New York or London based trader is in a trade when big news breaks he had better have his stops set or he could sustain significant losses before he realizes that a major event has hit the market. All told, trading Forex markets can be a profitable endeavor. As in all things it requires a skill set, discipline, and time spent at the trade station.