As a trader, you must know the best forex trading time. The optimal time to trade forex (foreign exchange) is when it is at its most active - that's when it spreads (the difference between the bid and ask prices) tend to narrow.

In this situation, less money goes to the market makers who facilitate currency, leaving more money for traders to pocket privately. The four main foreign exchange markets are located in London, New York, Sydney and Tokyo.

Traders need to commit their hours after knowing the best forex trading time, with special attention paid to the hours when two exchanges overlap. When more than one exchange is opened simultaneously, this not only increases the volume, but also increases volatility (rate and level of change in equity or currency prices).

Both of these factors can benefit a foreign exchange trader. This may seem paradoxical. However, investors are generally afraid of market volatility. However, in the foreign exchange business, greater volatility means a greater chance of a return.

Get to Know the Best Forex Trading Time by Understanding the Worldwide Forex Market Hours

As the best forex broker, we will tell you that it has 15 independent exchanges worldwide, open every week from Monday to Friday. Each exchange has unique hours, but from the perspective of the average trader, the four most important time windows are as follows (all times are shown in Eastern Standard Time):

1. London: 3 am to 12 pm (noon)
2. New York: 8 am to 5 pm
3. Sydney: 5 pm to 2 am (midnight)
4. Tokyo: 7 pm to 4 am
While each exchange functions independently, they all trade the same currency. As a result, when two exchanges open, the number of active traders buying and selling a particular currency increases dramatically.

The bids and demands on one foreign exchange market exchange immediately impact the bids and inquiries of all other open exchanges, reducing market spread, and increasing volatility. This certainly happens in the following window:

1. 8 am to noon, with the New York and London exchanges open
2. 7 p.m. to 2 a.m., with the Tokyo and Sydney exchanges open
3. 3am to 4 am, with the Tokyo and London exchanges open

The most profitable times or the best forex trading time are 8 a.m. to noon in New York and London. These two centers account for more than 50% of all forex trading. On the flip side, it starts at 5 pm. until 6 pm, it takes place mostly on the Singapore and Sydney exchanges, where the volume is much less than during the London / New York window.

There may be exceptions, and the expected trading volume is based on the assumption that no big news developments are revealed. A political or military crisis that develops during the slow trading-hours can potentially increase volatility and trading volume, making it a great time to trade.

High Volume Forex Trading Hours Don't Always Mean to Profit

Traders should proceed with caution as currency often involves high levels of leverage from 1000 to 1. While this ratio offers tantalizing profit opportunities, it comes with the risk of the investor losing the entire investment in a single trade. A 2014 Citibank study found that only 30% of retail traders break even or better. 

Interestingly, 84% of those surveyed believe that they can make money in the foreign exchange market. The main advantage is that new foreign exchange investors must open an account with a company that offers a demo platform, which allows them to make mock trades and calculate imaginary profits and losses. 

Once investors learn the ropes and become experienced enough, they can confidently start making real trades. By joining Didimax forex broker, you can learn more about this because we will provide you with free education service.

As a trader, you certainly don't want to go wrong in starting your trading. Besides understanding the rules of the game, you also have to prepare an accurate strategy. Understanding the best forex trading time can help you determine the right strategy.