What Are The Forex Trading Hours For Australian Currency Traders?
Perhaps the most popular element of forex trading is the amount of time the markets are open; this has proved to be quite liberating for traders. Unlike the stock market which has very rigid trading hours, Australian currency traders can trade 24/5 from 7:00am on Monday. The graph below shows the most popular trading times on global currency markets. Its quite easy to see how markets are interlinked and how forex trading hours truly are round the clock (during the work week at least).
Forex Trading Hours In AEST
Based on AEST, forex trading hours are Sydney, 7:00am – 4:00pm AEST; at 9:00am the Tokyo market comes online and before it closes, the London market comes online at 5:00pm; New York opens at 10:00pm and closes at 7:00am when Sydney opens again.
Most trading occurs when both the USA and UK markets are open from 10:00pm to 2:00am AEST during winter. In summer these hours shift to 12:00am to 4:00am due to daylight saving.
Generally, the opening of a market is the most important period as it often sets the tone for the session and can have very high liquidity (especially in the first few minutes).
Bank Holidays (Public Holidays)
During selected key national bank holidays (know as public holidays by Australians) a countries currency market may close limiting the overall forex trading hours. Worldwide, days such as Easter and Christmas lead to all currency markets to close. Normally when there is a national USA bank holiday the worldwide currency markets that do trade do so at lower levels.
Do I Need Multiple Forex Brokers To Trade All Hours?
The simple answer is no. Almost any Australian forex broker (or international fx broker) has the ability to access any currency market when open and trade multiple currencies within that market. Just because for example the Japanese currency market is only open, doesn’t mean you couldn’t trade currency pairings such as AUD/USD to EUR/USD. An interesting fact is that the AUD/USD is actually traded the most when the Australian market is closed highlighting that opportunities exist for currency traders all the time. It is possible that volumes for these currency pairings will be lower during different periods of the day but with currency markets volume being multiples of worldwide share-markets there is always opportunity to trade.
All Australian forex trading brokers are open 24/5. This means that they are open from when the Australian markets open on Monday morning till the end of US trading on Friday (or for Australian’s early Saturday). Not only can you trade through their forex platforms but the currency brokers also keep support open during all of these forex trading hours. This is critical if you require assistance even during the early hours of the morning.
At What Trading Hours Do Currency Pairings Fluctuate The Most?
There are no set hours when currency paring historically fluctuates the most. While volume/liquidity is the highest when multiple markets are open (eg when the London and New York markets are open) this doesn’t necessarily mean the currency will fluctuate more. There are though a few general events that can lead to currency pairings having large changes including:
1) When markets open
When a new countries currency exchange market opens often the first few minutes sees some larger price fluctuation as traders enter the market factoring in movements that have occurred in previous markets.
2) When rate decisions are made
Countries reserve banks such as the RBA make rate announcements at the same day of the month and a set time. These announcements directly impact relevant currency pairings and increase currency trading. Knowing the key reserve bank dates and times is critical for any trader.
3) When economic data is released
Like the reserve bank announcements, government departments regularly release economic performance figures from terms of trade to warehouse orders and production. Like rate announcements, these directly impact currency pairings and can see large fluctuations. Over 2015 the Chinese announcements have worldwide led to the largest fluctuations.
What Australian Forex Broker Features Suit Traders?
As mentioned earlier, all brokers are open during all hours that the major currency markets are active. There are though ways to work out which fx broker suits you including:
a) Leverage Levels
Without leverage making sizeable profit or losses would be near impossible. While leverage is a great benefit when forex trading it also increases your risk profile so only experience traders with a large risk appetite should accept high leverage.
There are two ways forex brokers make money. One way is through spreads which is the difference between the buy and sell rate. The second way is set commissions based on trading volume. It’s important to work out the volume you plan to trade and then working out based on average spreads/commissions which broker will provide you the best value for money. Generally, ECN brokers which allow you to make trades directly with out liquidity providers offer lower spreads than market makers.
c) Execution Speeds
With currency markets existing often overseas, having fast connections to these markets is critical when forex trading. Making sure that your fx broker not only has fast connections to overseas markets (eg through optic fibre cables) combined with fast servers will help give you the edge when trading outside of Australian market hours. It also reduced events such as slippage which is when your order is filled lower/nigher than when you placed the order due to the delays in execution speeds.
While all forex brokers offer stop/loss features when trading it is possible to lose/gain more than preset due to slippage. Many traders for this reason may require a broker that offers guaranteed stop loss orders so they can’t lose more than a set amount for a trade. Pepperstone also offers negative balance protection where they automatically exit forex traders from the market when their deposit level reaches $0 balance. Even if slippage does occur, Pepperstone pays the difference.
The final factor is understand what country regulates the broker. Australian regulation is considered one of the premium regulators requiring brokers to have training requirements and to segregate clients funds into separate accounts. Like with any investment product, if its too good to be true, it normally is. Play it say and ensure the broker make sure they have an Australian Financial Services Licence and has a good reputation and market share.