The working day of a currency trader in commercial banks in Europe, America and Asia begins at 7:30 am local time. Half an hour is spent on study of the events that took place since the end of the last working day. When all the information is gathered and analyzed they have a more or less clear picture of the likely changes in exchange rates and financial market for the next day with various scenarios of further movements. At 8:00 traders begin their job by actively making the first transaction.
Independent day traders in Singapore and other countries also start their trading day early in the morning by analyzing the market and determine their tactics for the coming day. When they enter the market and start open trades it has its influence on the changes in the market.
During the day you can watch how the activities of different territorial markets change.
This market is active from the deep night according to GMT. This is where the trading day starts. This zone is characterized with the greatest number of transactions made for the currency pairs associated with the Japanese yen, Australian and New Zealand dollars. Currency fluctuations are usually small during this time, about 50 points. Before noon Tokyo works very actively, before lunch – Singapore. Trading in Singapore is often concentrated on SGD as well as JPY, AUD and NZD. Being a big financial center in Asia Singapore Forex trading has a big influence on the market during these hours.
The European market such as Paris, Zurich, Luxembourg, Frankfurt am Main, opens at 7:00 am GMT time. But the real active European trading starts at about 8:00 am GMT when London Stock Exchange joins the market. Usually the market is very active for the next 2-3 hours before the lunch. During lunch break in Europe, currency fluctuations calm down a little to about 10-20 points. Such market is called boring, or even more than that – dead.
This is the time when it is almost impossible to trade and the movements are very small. But sometimes, you can watch very strong movements and trends during the lunch break that may reach big figures (up to 100 points). Such market is called occupied or busy market. If you have caught such a trend, it is a good opportunity to make nice profits.
At about 14:00 GMT, after dinner, European dealers resume their work. That is exactly the time when American traders start their work. When they join the European traders, the market experiences a big flow of funds. But the volumes and forces of American and European financial institutions are about the same, so currency fluctuations usually show small vibrations of a purely European session. But the opening of the New York Stock Exchange is extremely interesting for Singapore and other traders, because the American market determines the further movement of the courses.
In the evening, after 17:00 GMT when the European stock exchanges are closed and U.S. banks remain alone in the “thin” market, this is the time when strong movements take place associated with the American dollar. Changes in rates can reach several percent and held for 400-500 points. This is the time when the market experiences the biggest movements and many traders take their chances to make profits.