The forex market stays active 24 hours a day, making it difficult for a trader to keep a track of every single market activity. He cannot respond to every movement instantly. Time is the key factor in forex trading. A trader can maximize his trading opportunities by tracking the amount of market activity every minute during his own market hours. This also helps in formulating an investment strategy that is not only effective but also time-efficient.
Apart from liquidity, the trading range of a currency pair gets heavily influenced by macro economic factors and geographical location. The knowledge of exact times in a day when a currency pair has the highest or lowest trading range helps traders a great deal in enhancing their investment as a result of better capital utilization.
Forex Trading: European Session (London): 2am – 12pm EST
London forex market is the UK’s largest trading center. According to a survey conducted by the BIS earlier this decade, London has a market share of over 30%, making it the world’s largest transaction center. From April 2004 to April 2007, London’s share of the global turnover increased from 31.3% to 34.1%, as estimated by International Financial Services, London. Most of the larger European banks are located in this city. A majority of the forex transactions are carried out during London hours because of the high efficiency and liquidity of the market. Many risk lovers find the GBP/JPY and GBP/CHF to be the best trading pairs.