How Does Trading Work In Countries With Multiple Time Zones?

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How Does Trading Work In Countries With Multiple Time Zones
How Does Trading Work In Countries With Multiple Time Zones Pixabay

If you’re based in a country with multiple time zones, you’ll know just how difficult it can sometimes be to arrange your trading pattern. You’ve got plenty to think about: you’ll need to ensure that you’re organised enough to either be up and working at strange hours, for example, or to have a system of stop losses and other order controls in place.

But it’s certainly still possible to trade properly in a country with multiple time zones, not least because the financial sphere is so internationalised these days. This blog post will explore in more depth just how you can go about doing this without falling victim to problems.

What asset class?

It’s most likely true to say that the asset class you intend to trade strongly affects the extent to which your presence in a multi-time zone country matters. If you’re trading foreign exchange pairs, for example, you’re probably inevitably going to be sleeping when action is happening in one of the countries in your preferred pair.

You might trade pairs from countries based in time zones that are near enough, such as the Japanese yen and the Australian dollar. But if you’re trading, say, the New Zealand dollar and the British pound, you may have to accept that this asset class is inherently international – and build ways to deal with this into your strategy.

The potential pitfalls

The main pitfall is that trading timeframes can become awkward if you’re trading an asset class that is less internationalised and operates at specific times in specific places. Trading the stock market in a particular country, then, is another matter. Say you’re based in Perth in Western Australia, and you trade items on the stock exchange based in Sydney: this opens at 10am Australian Eastern Daylight Time, which is three hours ahead of you in Perth. For that reason, you may have to get up early if you’re a day trader – or run the risk of missing out on key market developments.

There are, of course, ways around this. You could use order control tools such as stop losses to manage risk when you’re not sitting at your desk. However, if you start using those tools rather than being online at the same time as the exchange you trade, you may find that it’s worth your while also to be trading on other regional stock exchanges such as the Singapore Stock Exchange – which is in the same time zone as you in Perth. This is where it’s essential that you find yourself visiting the best online brokers in Australia via a site like The Bull, as it’s these providers who can give you what you need in terms of choice of quality broker.

Internationalised finance

Finally, it’s worth remembering that the modern financial world is in many ways quite internationalised. This can have two vital potential effects for a trader based in a country with more than one time zone. The first one is that it can lead to the trader finding that time zones are not majorly significant. In a world where London can communicate with New York in a split second, time zones are not quite as important as they perhaps once were.

This is especially true when you assess the flow of information in the financial world. The internet has made it eminently possible to transfer data with great ease, and it’s now the case that you can head over to a financial news website that is based abroad pretty much no matter where you are. Sometimes, international access restrictions could inhibit the flow of data, although this is not likely to be a hugely pressing issue here in Australia.

In short, it’s clearly essential to factor in time zones if you’re trading in a country that is spread across many of them. Yet while time zones can pose some mild concerns for a trader, it’s also not the be-all and end-all. On the contrary, it’s entirely possible for a trader to get to a situation in which they can trade remotely in a whole host of different asset classes. It depends mainly on how willing you are to use risk management tools and exactly which asset class you want to trade.

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