How Time Zone Overlaps Have Improved Financial Trading
Any business that operates globally has to be aware of the different time zones. If nothing else, it helps them to coordinate meetings with their team and concentrate their marketing efforts to be delivered at the right time.
One of the perks of overlapping time zones is that it offers 24/7 market coverage, which is crucial for many business functions – think of online customer support as one example.
For those that like to trade and invest in assets, one of the common frustrations is that the markets close, so traders cannot open or close positions outside of these hours.
However, there is a workaround. Those trading in foreign currencies (forex) have the opportunity to take advantage of longer trading hours. They can also maximize the perks of overlapping time zones – creating 24/5 (forex markets are closed at the weekends) access to profit-making potential.
So, what are the key time zone overlaps?
Although the exact time difference differs depending on the trader’s precise location in North America or Europe, as a general rule the European market is seven hours ahead of its counterparts in the USA and Canada.
Even so, there is still an overlap that allows for a connection to be made in both locations, as 09:00 in North America is 16:00 in Europe – so there is plenty of opportunity for interconnectivity.
As for forex trading, when European brokers are calling time on their working day, their North American colleagues are still in the thick of things.
The jurisdiction generally known as ‘north Asia’ is around five-and-a-half hours ahead of Europe.
Traders in European countries that really want to get up and running early can do so because they will have access to the Asian forex market from the moment they wake up in the morning.
One of the most interconnected time zones links Asia to key Oceanic markets like Australia.
There are just two hours and 45 minutes separating the two jurisdictions, which ensures plenty of compatibility across both the business world and the financial markets.
When are the Best Time Zone Overlaps to Trade Forex?
It’s the million-dollar question for investors: when is the best time to trade forex?
Thanks to the overlapping time zones, traders have 24/5 access to buying and selling foreign currencies, so there is no single best time to trade.
However, it is worth noting that certain times are more agreeable than others due to liquidity, which is the amount of money flowing into the market and each forex pair.
Typically speaking, the higher the liquidity, the closer the spread between buy and sell positions – this is vital for traders seeking to get the very best price from their activities, whether they are buying long, day trading or even shorting.
The North American-European overlap is one of the key trading periods of any day. At this time currency pairs based on USD, GBP, EUR, and CHF are the most liquid, so 09:00-11:00 EST is an excellent time to access the market as it is 14:00-16:00 GMT…. the perfect time to buy and sell foreign currencies.