Holiday currency trading is a very attractive thing for new traders but it may be difficult to pull you away from the market and take a break from the action due to excitement. You should avoid trading on holidays because banks remain closed and big institutions and professional traders do not participate in online trading on these days. Due to this reason, two way trading is very limited and the prices can move easily in one direction if any big order comes in suddenly. In addition, sometimes a surprise event may happen that can make the market to move sharply and quickly. Since the markets are not liquid, these moves can take place within seconds. Therefore before you get a chance to act, the market can make a great move against you.
You may lose money due to the unexpected behavior of the currency trading market. The unexpected behavior of the Forex market is not unusual. On US holidays, there is a very little action in the market and hence technical analysis usually fails. The currency exchange activity in the market is so slow that you can hardly make good amount of money. You should not trade on holidays because you also need time to have rest. You should spend this time with your family. Since currency markets are very busy most of the time, therefore holidays are perfect time to recharge.
The foreign exchange market remains open for twenty-four hours Sunday afternoon (New York time) to Friday afternoon (New York time). In the late afternoon New York time, the trading is thinnest because the Asian markets are not fully opened during this time. The currency trading markets are in fullest swing during the overlapping time of the major money centers. A trader can easily exit out of the profitable trades when the Asian markets are closing and European markets are opening. This period of high trading activity is from 12:00 am to 2:00 am New York time. Most of the US traders prefer to trade in the wee hours of the morning and close their shop by 3:00 am to 4:00 am and spend the sunlight hours of the next day outside the Forex trading world.
No other currency trading centers overlap between 4:00 am to 9:00 am New York time period. During this time banks, hedge funds, brokerage houses and individuals in New York, London, Paris and Zurich are trading to make their fortunes. These are the heaviest currency trading hours of the day because the overnight news of the Asian markets met with the developments of the European markets and is digested by the awakening New York markets. Sometimes on big news days such as interest rate changes, inflation numbers, announcements made by the central bank in Europe etc., there is a chance that similar news can be heard in the morning in North American countries. The effect of such Forex news can be seen on the direction of the major currency pairs and the markets may become volatile.
For indian currency traders you can find the holiday list here @ Currency Derivatives holidays
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