Forex Market Sessions and Time-Zones
The Foreign Exchange market is open and active 24 hours a day, 5 days per week. This unique feature allows Forex investors in all over the world to trade during their normal hours.
Two Time Zones
There are two Forex time zones (Summer and Winter):
Forex Market Sessions
Currencies trade 24 hours a day, 5 days a week. This round the clock trading process exists due to different time zones where markets operate in the four corners of the world.
The Foreign Exchange market is divided into four main sessions: the European, the North American, the Australian, and the Asian sessions. Alternatively, these sessions are called as the London, New York, Sydney, and Tokyo sessions. As it was mentioned before, there are two time zones (Winter and Summer Zones).
(a) WINTER ZONE (OCTOBER-APRIL)
◙ EST (US) WINTER TIME ZONE
Typical EST/EDT Forex Winter Trading Hours:
◙ GMT (UK) WINTER TIME ZONE
Typical GMT Forex Winter Trading Hours:
Introduction to Forex Carry Trade
Carry Trade is an effective long-term trading strategy and a strong force driving key Forex trends.
What is Forex Carry Trade?
Forex Carry Trade means selling a low-interest rate currency and buying the same amount of a high-interest-rate currency. The concept is to make money based on the interest-rate differential.
Popular Currencies for Carry Traders
A carry trade will go long on currencies such as the New Zeeland Dollard, the Australian dollar, or the Turkish Lira, and go short on currencies such as the Japanese yen and the Swiss Franc. The most popular currency pairs for carry trading are:
■ AUD/JPY, NZD/JPY, EUR/JPY, USD/TRY, and GBP/CHF
Carry Trade can also mean borrowing in a low-interest rate currency, converting it to a high-interest-rate currency, and buying the highest rated bonds (check the Yen Carry Trade below).
When Central Banks Change their Rates?
Carry trades can prove very effective when central banks increase or plan to increase the level of domestic interest rates. Central banks change the level of the domestic interest rates aiming to achieve long-term financial stability and growth.
(↑) Why Central Banks Increase Interest Rates?