Understanding Auto Forex Trading Time Zones

Posted on August 31, 2010
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For an average trader, forex trading time zones can be intimidating and difficult . Just like many other traders, when I started out trading this 24 hour global, cash market , I couldn’t make a lot of sense from the time zone issue. That changed over time however and in this article I will share some basic insights on how I handle this market and hopefully this will give you some help when getting prepared for another big trading day.

The first thing you need to consider is where you live , or where you’ll be doing most of the auto forex trading trading from. This will be the single greatest factor affecting the way you look at this 24-hour market. For an example let’s say that you live in California which is on the West Coast in the U.S. and on Pacific Standard Time which is three hours behind East Coast time in New York.

Now that we know the trading will be done in California, and we know it’s three hours behind East Coast time, we can start planning our auto forex trading trading day. In this never sleeping 24-hour market (but gets very quiet on weekends and major international holidays such as New Years ) when the New York financial centers close the trading day stops and resets at 5pm or close to that in Eastern Standard Time and the banking centers in the Far East like Hong Kong and Tokyo about the same time are opening and starting a new day . Taking this into consideration it is best to set your trading charts up so that the daily bar or candle use use closes each day at 5pm EST .

Since we know we’re trading from the US West Coast which happens to be three hours behind EST in New York and we’re aware of when the 24-hour market will stop and rest for another day. The next thing to consider is when you will get ready and plan for the next day . If California is where you live, like our example, and you like staying up late then perhaps you’d like to get ready to trade the London session from about 1am Pacific Standard Time to 4am Pacific Standard Time . Perhaps you like sleeping and you want to sleep through the session in London but getting up early is no problem , around 4am PST (7am EST) so you can see what the end of the London session looks like and get prepared for the session in New York which gets a good start at 8:30am EST or 5:30am PST. Perhaps getting up early isn’t your thing and so you’d prefer to be a middle of the day trader ; no problem . Simply wait until about 2pm Pacific Standard Time when Tokyo gets started and you can do your trading during this session .

Now you’ve got a clear handle on what the major forex trading time zones are all about and you can accordingly plan your days . And remember , planning and preparation are perhaps the two most over-looked, yet important factors of success in this business and any other business .  Thinking this through you should be able to plan your auto forex trading day.

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