Do You Yen to Pound Out a Profit?

Currency trading is really not as hard as it looks. Before a single cent is traded, you need to take the time to educate yourself. Always trust yourself more than anyone else. Forex trading is oftentimes traded with an underlying emotion or hunch. Someone else's hunch may not be the same as yours. The best thing to do is take the human factor out of transactions completely by using automated forex trading.

Forex trading platforms are basically charting tools to make trading easier. Good automatic forex trading programs will work with any platform and all currencies can be used with the automated Forex trading software. Most will also support well over 20 currency pairs.

Among all the countries in the world, five currencies stand out as the most popular:

Swiss Franc - The Swiss franc is independent of the G7 countries and the European Monetary Union yet historically continues to be one of the top five currencies. This is partially based on the fact that the Swiss economy is one of the most stable in the world.

British Pound - This currency is traded competitively against the US Dollar and the Euro. It was the currency to beat until late 1940's when the US economy began to stabilize.

Japanese Yen - Although the Yen's presence is small compared to the US Dollar and the Euro, it is still considered the third most traded currency. It has many traders, but remains very liquid.

Euro - A new currency that came into being in 2002 and is the legal tender of12 different countries withing the European Union. It's popularity has grown fast and is the second most traded currency.

US Dollar - The primary currency of the world. Every currency traded is evaluated against the dollar. This is the number one traded currency and tends to be involved in the best Forex trading transactions.

Beginners may want to stick with these five until they become more experienced. Other pairs become tricky to trade. Trading exotic pairs can be confusing with limited options, but it is possible. Automated Forex trading makes it easier.

The Best Hours To Trade Forex

Forex trading has become extremely popular with small investors and it is now an easy market to enter with relatively small investment capital. It is also the world's largest and most liquid financial market with trading operating around the clock.

The market offers the opportunity for many small investors to literally quit their day job and make a very comfortable living working from home over the Internet and has indeed made many small traders very rich indeed. However, like most things in life, it is not without its downside and trying to trade without knowing exactly what you are doing is a recipe for disaster.

One question which many novice traders ask is "when is the best time to trade?"

The forex market is a very volatile market and prices can move up and down very quickly and literally from minute to minute, so that every minute you are in the market is an important minute. Choosing just when to trade, as well as having a variety of safeguards in place for every trade, is thus an important consideration. Remember though that you can enter and exit the market as many times as you like during the course of a day and so we are not talking here simply about choosing your working day in the same way that you would choose your hours for a regular day job. You can, for example, enter the market by opening a trade at 10:00 am and exit the market by closing that trade at 10:10 am. You might then decide to stay out of the market for a while and start trading again at 1:25 pm by opening your next position.

There is no 'home' for the forex market and trading takes place across the globe, although there are a number of significant trading centers in each of the three main trading regions of Australasia, Europe and North America. For example, within Europe trading takes place in several cities including London, Frankfurt, Paris and Zurich.

In theory the market is not in fact open 24 hours a day and each trading center will have its own set operating hours. Trading for example starts in Sydney and is followed by trading in Tokyo, London and New York. Because of global time differences however you will find that there is a trading center somewhere in the world which is open at any time of the day or night, seven days a week, and since traders have access to all of these trading centers you can effectively trade around the clock.

As an example, the time is just coming up to eleven o'clock on a Friday morning in Thailand as I write this article, so where can I trade at the moment. Well, the markets in Europe and North America are currently closed, but I could trade if I wished to do so through Sydney or Tokyo. However, if I decide to spend the afternoon on the beach (which is entirely possible) and then to trade later in the day then the markets here in the Far East would be closed but I could trade first through London or Paris and later through New York.

Now this is all very well but the question is not really when can you trade, but when is the best time to trade?

Trading volume is high through the day simply because of the sheer size of the market but this volume will peak whenever the trading hours of two or more of the three main trading areas overlap. This in fact happens at two time periods between 2 am EST and 4 am EST when the Australasian and European markets are operating at the same time and between 8 am EST and 12 pm EST when the European markets and North American markets are both open at the same time.

So, unless your trading strategy involves specific currency pairs being traded in particular markets, the times above are those times when you will see the greatest number of possible trades and thus the times which many traders find to be the most profitable.