FOREX TRADING FOR DUMMIES – Automated Forex Trading

Forex Trading Hours Are Important In The Forex Market

Although Forex trading is influenced by a tremendous amount of variables, there is one specific constant though that most investors need to be aware of, and that is Forex trading hours. Theoretically currencies are traded constantly on a 24/7 basis, even though it actually works from Sunday afternoon, on Eastern Standard Time, until Friday afternoon, again EST. What happens in actuality though is that as one market closes, essentially another opens somewhere on earth. In this respect actual Forex trading hours extend beyond or overlap others, so that you can trade continuously.

Thus it is a 24/7 market opportunity, however some trading hours offer superior opportunities. Superior opportunities equals better profits, of course.

Experienced traders will tell you that the best entrance time in the various Forex markets is when the larger volumes of currencies are actually being traded. Therefore this time is when numerous countries are in the act of actively trading. Now, no matter what time zone one is speaking of, all Forex markets function from 8 am until 4 pm. You may have garnered by now, that the best Forex trading hours are when the different countries’ markets overlap.

Actually this is when the Forex market is extremely active, thus the traders have a better likelihood of making significant profit since that is when large volumes of trades occur, thus the biggest pip movements occur as well. World clocks, that are available free online, serve to allow us to compare the various markets to delineate the most profitable times. For instance, again using EST time zones, London and New York overlap from 8 am to 12 am (EST). Another instance is that Tokyo and Sydney overlap from 7 PM to 2 AM  (EST). See the table below.

Forex traders will also tell you that trading is rather active from 1 AM to 3 AM EST., seeing that the European markets are just waking up as the Asian markets are finishing, which in turn are opening up excellent trade opportunities. The same applies to the 7 pm to 10 pm EST time phase, when the Australian and Asian markets overlap.

All successful active traders are always highly knowledgeable as to what time overlaps are available, and everyone agrees that London is the financial center as far as Forex trading is concerned. Keep in mind that slower markets always offer less chances of making profits, thus you can see why Forex trading hours are of extreme importance in the Forex market.

Note: Best Forex Trading Hours
The busiest trading volume occurs when US and London markets are trading, overlapping between 8:00AM and 12:00 noon EST, these hours are recommended to trade.

Forex Trading Hours In Some Countries

Australian – Forex Trading Hours
- Sydney trades between 5.00 PM to 2.00 AM EST, Sydney Stock Exchange overlaps with Tokyo.

Tokyo – Forex Trading Hours
- Tokyo opens from 7.00 PM to 4.00 AM EST and overlaps with London for one hour.

London – Forex Trading Hours
- London is one of the busiest forex trading market, big volume of money are trading during their sessions. London trades between 3.00 AM to 12.00 PM EST.

New York – Forex Trading Hours
- New York trades between 8.00 AM until 5.00 PM EST and overlaps with London for 4 hours.

Forex Trading Hours Chart

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What is Forex Option Trading?

If you travel you know that often you need to exchange your particular type of money, say U.S. Dollars for another type of foreign money.  Let’s say, it’s the Euro if you are going to Europe. Forex is just that, but on a bigger scale. For instance you’ll find that it is accomplished by large import or export companies who wish to tie down a certain rate for a future date. Using the options, speculators or investors through option strategies can take advantage of the various rates that abound. It’s a kind of insurance policy that will be valid and effective if and when specific conditions are met. In order to obtain that right, the Forex option buyer will then pay a premium to that seller, and this premium will be automatically calculated using certain formulae.

Put very simply, in Forex option trading system , the contract, or policy if you wish, can then be sold, so that the person holding that contract will then exercise his option, and if the market was favorable will make the difference in that market price, or lose the premium paid if the market went down. The market is called a spot market, and of course in our example above if you are holding US dollars and the Euro is gaining on the US dollar, you would then sell, or if vice versa, then you would buy. The beauty of Forex option trading is that it is instantaneous, as there is no storage involved as there are with commodities such as grain, beef or oil, for example.

When the expiration date occurs, a call buyer may buy that spot position at the agreed upon strike price, but a put buyer can sell at the agreed upon strike price. One of the greatest features of Forex option trading is the sky is the limit in possible buyer profits, and the premium paid covers the risk.

A number of important factors will influence pricing of a Forex option, the lifespan of the option, the volatility of the market, and interest rates. For example the volatility of the market is even separated into either implied volatility or historical volatility. There are numerous free online tools for working the Forex options trading market, forex trading tutorial as well as free online courses to take, which will spell out the delightful intricacies of this fascinating investment device for you. Forex options trading dealings are extremely interdependent and of course subject to constant changes which enable many to make outstandingly profitable investments. Please check out recommended forex option brokers below.

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