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Investment capital tends to flow to the countries that are believed to have good growth prospects and subsequently, good investment opportunities, which leads the country’s exchange strengthening. Sydney, Australia (open 5 p.m. to 2 a.m.) is where the trading day officially begins. Securities such as domestic stocks, bonds, and commodities are not as relevant or in need on the international stage and, thus, are not required to trade beyond the standard business day in the issuer’s home country.<\/p>\n<\/p>\n
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Furthermore, when banks and stock exchanges in more than one major financial centers are open simultaneously, the trading volume and liquidity go up substantially. When you first came to know about the global currency market, you probably came in touch with marketing materials claiming that this market remains open 24 hours a day and seven days a week. Anyone who traded equities (stocks) or any other commodities knows that stock exchanges or other markets are usually open during banking hours in a day. However, being a decentralized market, the Forex market has no rigid trading hours. International currency markets are made up of commercial banks, companies, central banks, investment management firms, hedge funds, retail forex brokers, and investors around the world. Because this market operates in multiple time zones, it can be accessed anytime except for the weekend break.<\/p>\n<\/p>\n
Not only can this strategy deplete a trader’s reserves quickly, but it can burn out even the most persistent trader. Hence, if you overlay the trading volatility in a forex market hours chart, you can see that it spikes up when trading begins in the financial center located next in the time zone. And so Overlapping hours of the London trading session and the New York trading session is the best time to trade forex, since the market is most active. So, cross-border investments that require moving funds from one end of the globe to another generally contributes to a higher level of trading volume in the global foreign exchange market.<\/p>\n<\/p>\n