October 2, 2013

When to Trade Forex Live

Trading Forex Live

One of the attractions of the forex live market is that it operates 24 hours per day, five days a week.  This does not mean you should be trading for all these hours.  There are certain times of day that are best for certain forex live traders.  The time of day you should consider should be closely related to the currency pair you are going to trade.  It is important that you know when the foreign exchange rate will be good for your trading and when it would be bad.

Times of Operation

While the forex live market operates all day there are still market times.  These market times relate to the countries that are trading the most.  There are four market sessions relating to the different parts of the globe.  These four sessions are the North American, European, Asian and Australian sessions.  During these sessions there are certain foreign exchange rates that trade better than others and it is best that you know what they are.

When is the Market Most Active?

While there are different sessions and you have to trade different currencies there are also highly active times that you have to know about.  These active times are when the market sessions overlap.  However, not all overlaps are as busy as others.  There is one overlap, the North American session and European session overlap, that is the one you should look at.  During this session there is the highest number of traders online.  During this highly active period the market is more liquid and volatile.  This is good for a lot of trading strategies as they require the volatility of the market which is felt most at these times.

Which Currency?

To know which session you should be trading in you have to consider the currency you are going to be trading.  A general rule of thumb is that you should trade the currency during the countries market session.  This means that if you are trading the Euro then you should do this during the European session.  During the overlap times the rules may change slightly.

During the North America and European session overlap you should look at trading US dollar, British Pound and Euro pairs.