Forex trading is one of the most common activities in the field of commerce. For many years people have continued to invest in the forex market and yield profits going to good investment techniques and knowledge that they have earned before. A good part about investing in foreign exchange trading is that it is open to everyone and anyone. Even if you have a dollar, you can invest in the forex trade.
The growing prominence of the Forex market
The foreign exchange market can be understood as a global over-the-counter type market where currencies of different countries are treated at a particular rate. The rates are fixed according to the currency’s value at a particular time, and it does not change concerning the amount of currency you are investing in for trading.
Even in South Africa, forex trading has become much prominent over the past decades as more and more people are becoming aware of the foreign exchange trading system and how it can be used profitably only if a person decides to invest after much thought and knowledge.
Common time zones
Most of the people who invest in the foreign exchange market regularly are well aware of how the time you invest can influence The returns you get. There are mainly four time zones that are followed internationally across different countries.
- London: From 3 a.m. to 12 p.m
- New York: From 8 a.m to 5 p.m
- Sydney: From 5 p.m. To 12 a.m
- Tokyo: From 7 p.m. To 4 a.m
Each of these foreign exchange markets works independently, but they trade the same set of currencies. Initiate that read in the forex market anytime; however, the limitation while following the particular time zone cannot be ignored if you want to participate in the foreign exchange trade from the four zones above.
Forex trading and impact of the time zone
Most people prefer to initiate their trading when the New York exchange market involves exchanging of doing US dollars which is a part of more than 80% of all the currency trades.
Best times to trade forex in South Africa
If you are a trader in South Africa, you can also take advantage of the time limit and get maximum profits if you manage to complete your trade at the right time. If you check out online and try to know that is the best time to trade forex in South Africa, the internet shows that one should prefer to do the same between 10 a.m. and 7 a.m. according to the South African standard time.
However, if you try to match it with the other international market timings that are followed worldwide, you will notice that 10:00 a.m. South African standard time is when the London session opens, whereas 5:00 p.m. is 2 hours after the US session has started. This time limit provides a South African trader the maximum benefit.
But, there have also been studies that indicate the benefits of investing during the daytime and how it can benefit a trader to the maximum. It is said that closer to the rollover time, the spreads on various currencies are generally much wider than usual. This can result in a risky trade as there are more chances of encouraging losses. A safety precaution that you can take to minimize the losses is by initiating the trade just 30 minutes before the rollover. You can also wait until 30 minutes once the rollover has been completed. These are the times where a trader can sense the minimum volatility. Moreover, since 30 minutes is not a big difference in the time, it shouldn’t make a material difference either.
Mind individual preference too
If you find yourself keen on trading within a short time, it is suggested to choose time frames between 5 minutes to 15 minutes for executing the same. In this time frame, trading intraday is expected to be more technical, and therefore it is recommended to keep tabs on the microeconomic calendar. If you plan for intraday trading, you must be a lot between 10 a.m. to 7 p.m. SAST.
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