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Global Forex Trading

The global Forex market (foreign exchange) market is the largest and oldest financial market in the world, called "FOREX" or "FX" market for short. It is the biggest and most liquid market investment market, with daily turnover of trillions of dollars, and is traded mainly through the 24 hour-a-day inter-bank currency market or the primary market for currencies.

The World Biggest Investment Market

Average daily turnover is about US$4 trillion as estimated by the Bank for International Settlements and global Forex trading is actually the world's biggest business, it's a market which never sleeps and follows the sun around the world - as the markets in the Far East close, the European markets open and then the trading moves to North America and then the cycle repeats again.

Major Forex Trading Centers and Trading Times

The major Forex centers are reflected by time zone. With London being the biggest market, followed by New York and then, the Far East of Tokyo, Hong Kong and Sydney.

The European session starts with Frankfurt at 2am EST time and then London follows shortly afterwards at 3am EST. time. There is heavier volume in this session which features lots of volatility and good liquidity then trading starts to slow down about 12pm EST. The US market opens at 8am EST and then slows down around 4:30 pm around the time US share markets close. Volatility and liquidity usually Falls after the European session closes and starts to rise again a US equities start to trade. The time the market has the lowest volumes, is the time between the US close and Asian open.

Best Currencies to Trade

So is there a best currency to trade? Let's take a look..

The Dollar is the world's major currency and the most popular pairs to trade against it are - the Euro and Yen. Liquidity in these currencies is high and so to is volatility. Other popular currencies to trade against the Dollar are - the Pound, Swiss Franc and the Canadian and Aussie Dollar. These currencies all offer good liquidity and reasonable spreads. The Major currencies tend to trend and consolidate at different times, so a currency which is the best one to trade, will change at any particular moment in time.

Our view is to keep your eye on them all and don't, as many traders do, just focus on the Euro and Yen because you get some fantastic trends in the others as well.

The cross rates can also offer some great opportunities, spreads can be higher but you do get some good trends and the volatility can some times be lower, as they are less observed by speculators which means trends can be easier to catch and hold than in the major currency pairs. The crosses we like are - the Euro v Pound, Swiss Franc and Yen but you will get opportunities across the board.

Be flexible and look at the currency pairs in the same way and be prepared to trade where the best opportunities are, rather than just focusing on a few. So in conclusion, look to study all the major currencies against the Dollar and always keep an eye on the cross rates.

Is There a Best Time to Trade Forex?

You will hear a lot of people telling you that there is but so long as your consistent in the times you trade, you should do well. The two best times from a personal point of view are:

The London open and US close and another good time is just after the US equity markets open. This is just a personal view and you should trade the times that fit in with, where you live and how much time you have to trade. Keep in mind that 2 or 3 times a day to check prices is enough for most traders.

Getting Used to Trading Currencies

Look to open a demo account with a Forex broker and you can get the feel of trading currencies on an online trading platform, you will see how easy it is and also be able to see the profit potential. Forex brokers offer these for free and when you use one, you can find out how to trade currencies and also have some fun at the same time.

Getting Started in Global Forex Trading

Global Forex trading is an exciting market and you can make a lot of money but you do need to do your homework and research and you will find more info on how to do this elsewhere on this site.