With today’s global market availability, assets can be traded on a 24 hour cycle, as every exchange is open for a different period. The time zone governing each market has an effect to international news.
For example, the Asian markets are closed during American afternoon hours and this means that the Asian markets are not able to react in regards to a potentially market moving event that occurs during US trading hours until they are open again. By that time, other news announcements may have taken the lead over the original event or neutralized it, so that it effect might be diminished and have less impact on the Asian market than it had on the American market.
Being aware of which exchanges are open at the time you are analyzing a news event for its market importance is paramount to your trading strategy and success.
Global Foreign Exchange Trading Hours (GMT)
Top Trading Hours
Overlaps in foreign exchange market hours occur at the following times GMT:
Sydney and Tokyo: from 00:00 to 07:00 (GMT)
New York and London: from 13.00 to 17:00 (GMT)
London and Tokyo markets overlap for one hour only, from 08:00 to 09:00 (GMT)
Peak opportunities arise when you trade currency pairs of two markets that are open concurrently.
For example, the European and American markets that trade EUR/USD, GBP/USD, or USD/CHF are simultaneously traded from 13:00 to 17:00 (GMT). These are the ideal timeframes for trading these currencies, since over this period the largest volume of trades are being conducted, thus creating a greater market movement and offering more opportunities for you to take advantage of market fluctuations. Likewise, from 00:00 to 03:00 (GMT), the Asian and Australian markets are both simultaneously traded, creating an equally attractive trading opportunity.
Another important trading timeframe is the period from 06:00 to 08:00 (GMT), when the European and Asian markets overlap, as the European opens, and the Asian closes. However, by 10:00 (GMT) the Asian markets have closed while the European markets are experiencing peak trading volumes.
So, although you can trade world markets 24 hours a day, by taking advantage of certain peak trading hours will enable you to maximize your chances for success and allow you to take advantage of the full potential of global financial markets.