Currency Trading UK: You Know It Makes Sense
Currency trading UK style is the best option for many traders for several different reasons. The first is that London is still the world’s financial capital in many ways. Wall Street may be the center of the stock market trading scene and the US may be the biggest economic power in the world, but the British are still successfully fighting their corner on currency exchange.
In the days before satellite links and the internet, trading between London and New York was handled by a cable running along the floor of the Atlantic ocean. That is why the GBP/USD currency pair is still known as ‘cable’ today. For obvious geographic reasons, London had much better communications with the rest of Europe and it remains the hub of the currency markets today.
The fact that the US dollar is the most widely traded currency is just about irrelevant. Many of the American and international banks concentrate their activities through London dealing desks, even though these days it does not matter where you are physically based. Do not make the mistake of thinking that London trading hours are only relevant if you are involved in a GBP pair. All of the currency pairs are traded here.
What matters is liquidity and this is often highest during the London currency trading hours. Highest of all, of course, is during the overlap between UK and US business hours. This is the peak time for forex trading, from 8 am to 11 am EST or 1 pm to 4 pm GMT. The times can vary a little bit around October and March because the two countries do not switch to and from summer time on the same weekend.
However, these hours are often dominated by US financial news which can make the New York morning a risky time unless you are very well informed. For this reason many traders prefer to trade the earlier part of the London business day, especially those who live in the UK or in more easterly time zones.
The UK morning hours are evening in Asia and most of Australasia which suits many traders. They are also convenient for British and European traders, of course. It does not work out so well for those in North and South America, however. On the east coast you have to rise early enough to start your day well before the New York markets open. On the west coast, which is 8 hours behind UK time, you would have to be trading in the very early hours, from midnight to 5 am.
But forex is a global market and the American continent cannot expect to have everything set up to suit them. Currency trading UK times could be a profitable option that you should seriously consider, even if it means reorganizing your day – or your night.
