THE 8 MAJOR CURRENCIES
There are thousands of securities in the stock market, However, in the forex market most trading takes place in only 8 major currencies which include; the U.S. Dollar ($), European Currency Unit (€), Japanese Yen (¥), British Pound Sterling (£), Swiss Franc (Sf), Canadian Dollar (Can$), and to a lesser extent, the Australian and New Zealand Dollars. These major currencies are mostly traded because they epitomize countries with venerate central banks, stable governments, and approximately low inflation rates.Currencies are also always traded in pairs, for example USD/JPY or Dollar/Yen at floating exchange rates.
A 24 HOUR MARKET
The foreign exchange market operates round the clock, that is, 24 hours a day, unlike the stock market, it has no official opening time or closing time. It moves in response to geopolitical events, press releases from key central banks, and reports on the economy from government statistical bureaus, among many other factors. When traders are not active in one part of the world due to nightfall, there are traders in other part of the world who are actively engaging in trades as it is daytime in their locations.
The daily session "ends" at 5PM EST, but the market does not close. The forex market only closes on Friday at 4PM EST for the weekend, and opens again at 5 PM EST on Sunday. Each day, trading begins in Sydney, Australia, and progresses to the next major financial center (Tokyo, London, New York), as the business hours in that city's time zone begin.
BUSINESS HOURS OF FINANCIAL CENTERS:
The trade volumes in a particular region are always high during its elementary business hours, when traders at financial institutions are busy placing orders. The most active times, meaning the times of most liquidity and movement in the markets, is the London open (3 AM EST), and the overlap between London/Euro close and New York's open (8-11 AM EST).
The hours below harmonizes to traders living in the EST time zone.
• New York session starts at 8:00 am and ends around 5:00 pm.
• Sydney session opens at 5:00 pm and ends around 2:00 am.
• Tokyo session begins at 7:00 pm and closes around 4:00 am.
• Frankfurt session starts at 2:00 am and closes around 11:00 am.
• London opens at 3:00 am and ends around 12:00 am.
Most trades on the forex market are a result of traders who speculates on price movements. Although good speculating skills are crucial to any trader, there are also other, more scientific pointers that traders use to detect whether they will buy or sell a particular currency. These are found by fundamental and technical analysis. A trader may utilize both technical and fundamental analysis before making any forex trades.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.