Forex Trading Time Zone Basics

One of the great aspects of the foreign exchange (forex) is that it is open 24 hours a day. In the U.S., trading begins on Sunday evening and does not close until Friday afternoon. So whether you have time to trade during the day, prefer to trade at night, or work full-time and have to fit trading into your schedule wherever it will fit, the forex market is a great market for you.

How can the foreign exchange be open 24 hours a day?

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Well, the forex does not have a central location like the NYSE or Nasdaq. The forex is made up of digital connections between major banks through the whole world. So if it is midnight in the U.S., you can still trade currencies because you don't have to trade just through a U.S. bank. The forex network will send your trade to whichever bank happens to be open at the time. This is all transparent to you - you just press the buy or sell button, and your trade finds its own way from there.

Forex time zones are generally broken up into 3 sections:

Tokyo session: 7 PM - 4 AM Eastern
London session: 3 AM - 12 PM Eastern
U.S. session: - 8 AM - 5 PM Eastern

Now again, no matter where in the world you are, you can trade 24 hours a day. These sessions just indicate when professional traders in these geographic locations are trading. For example, in the United States, banks, professional traders, and major corporations do their trading from 8 AM - 5 PM Eastern. Traders in Asia or Europe are sleeping or enjoying their evening during these times.

As you can see, certain trading sessions overlap. The London and U.S. sessions overlap from 8 AM - 12 PM Eastern. Overlapping times mean that there will be more trading activity and, thus, more price movement. Price movement is very good! Price movement allows you to make money.

Most forex participants trade during the London session or the U.S. session. You can make money during the Tokyo session, but sometimes the price movement is very small. But I have seen some people trade very profitably primarily during the Tokyo session.

I love the forex for many reasons, but one of the reasons is that I can trade anytime that is convenient for me. No matter what time of the day works for you, the forex will be ready!

Forex Trading Time Zone Basics

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