The forex trading time zones can be both difficult and intimidating to the average trader. Like most traders, when I started out trading this 24 hour global, cash market, the time zones issue never made a whole lot of sense to me. That changed over time however and in this article I will share some basic insights as to how I handle the 24 hour market and hopefully that will help you the next time you’re preparing for your next big day of trading.

The first thing you need to consider is where you live, or where you plan to do most of your trading from. This will be the single greatest factor affecting how you look at this 24 hour market. For the purposes of our example here let’s say that you live in California on the West Coast of the United States in the Pacific Standard Time (PST) zone which is 3 hours behind New York’s East Coast time.

Now that we’ve determined that we are going to do our trading from California, which is 3 hours behind New York, we can begin to plan our forex trading day. In this 24 hour market that never sleeps (but gets very quiet on weekends and major international holidays such as New Years) the trading day stops and resets with the New York financial centers closing at or around 5pm EST and the Far East banking centers of Tokyo, Hong Kong, etc. opening, starting their new day, at about that same time. So with that in mind it is best to set your trading charts up so that the daily bar or candle that you are using closes at 5pm EST every day.

So now we’ve determined that we are trading from the West Coast in the US which is 3 hours behind NY’s Eastern Time and we also know when this 24 hour market stops and resets for the next day. The next thing to consider is when you will get ready and plan for the next day. If you’re living in California, as in our example here, and you’re a night owl then perhaps you’d like to get ready to trade the London session from about 1am PST (4am EST) to 4am PST (7am EST).

Or, maybe you enjoy your sleep and want to doze through the London session but have no problem getting up early, around 4am PST (7am EST) so you can see what the end of the London session looks like and prepare for the start of the New York session which will really get going around 5:30am PST (8:30am EST). Or, finally, perhaps you hate waking up early and so you’d prefer to be a middle of the day trader; no problem. Just wait until around 2pm PST (5pm EST) when the new day in Tokyo starts and you can trade FX during that major market session.

Now you’ve got a clear handle on what the major forex trading time zones are all about and can plan your days accordingly. And remember, planning and preparation are perhaps the two most over-looked, yet important factors of success in any business, including this one.