When’s the Best Time to Trade Currency?
You know how everyone watches their favorite TV shows at a certain time, like in the evening? And that’s when TV channels get the most viewers? That’s kind of like how trading works. There are times when lots of people are trading, which is kind of like “prime time” for trading.
When Do Most People Trade?
The best time to trade is when two big trading sessions overlap. Imagine two popular TV shows being on at the same time – lots of people would be watching, right?
But which two sessions are we talking about?
Trading When Tokyo and London Overlap:
During this time, there’s not a lot of action. It’s like when you’re watching a TV show and it gets a bit boring in the middle. Many traders in Asia are winding down, while European traders are just getting started. This might be a good time to relax or plan your trades for the busier times coming up.
Trading When London and New York Overlap:
This is the main event! It’s like the season finale of your favorite show. Most traders are active during this time because London and New York are two major trading hubs. A lot of big moves can happen, especially if there’s breaking news from the U.S., Canada, or even late news from Europe.
If there were any big trading trends in Europe earlier in the day, traders in the U.S. might jump on that trend, making it even stronger.
Also, at 4 pm London time, there’s something called the “London fix.” Think of it as a standard price for the day. Since currency prices change every moment, traders and banks like to have a daily price to refer to. You might see a lot of trading just before this fix, and then suddenly it might go quiet.
Lastly, since it’s getting late in Europe, some traders there might start closing their trades, which might make things a bit unpredictable just before lunchtime in the U.S.