Best time to trade currencies in forex
The foreign exchange (Forex) market is the largest and most active financial market in the world, known for its round-the-clock trading. But when exactly does the forex market open and close? Find out when the global forex market opens and the best time to trade forex.
What is the opening time of the foreign exchange market?
Forex market hours operate 24 hours a day during the week, but the market is closed on weekends. This continuous trading is only possible because Forex is traded in decentralized locations around the world.
Forex market hours are divided into four main trading sessions:
- New York
They are the largest trading hubs, accounting for around 75% of the daily currency volume. Markets are open from 10pm (UTC) on Sunday – when the Sydney session begins – until 10pm on Friday when the New York session closes for the weekend.
Forex market hours
At any given time, there is always an open trading session although there is downtime when the market is quiet – usually between 7pm and 10pm, when the New York session ends before Sydney opens.
Forex market session opening time
The opening time of the forex market depends on which of the four forex trading sessions you are interested in. Since it would be impossible to trade around the clock, forex traders tend to focus their energy on specific sessions or time frames.
The opening hours of the foreign exchange market are:
|session||local time||Eastern Standard Time (EST)||Coordinated Universal Time (UTC)|
|sydney||opening||7 am||5 pm||10 p.m|
|off||4 p.m||2 o’clock||7 am|
|Tokyo||opening||9 am||7 p.m||1:20 p.m|
|off||6 p.m||4 am||9 am|
|London||opening||8 am||3 am||8 am|
|off||4 p.m||1:20 p.m||4 p.m|
|New York||opening||8 am||8 am||1 p.m|
|off||5 pm||5 pm||10 p.m|
It is important to know that Forex opening and closing times vary depending on the time of year, as countries that change daylight saving time will change market hours depending on the time of year. March, April, October and November.
When is the best time to trade forex?
The best time to trade forex is when the market is most active – that’s when you’ll get the tightest spreads and the best chance to execute a trade at the level you want. The forex market is usually most active when market hours overlap between sessions, as the number of traders buying and selling each currency increases.
Overlapping windows for trades are:
- 1:00 pm to 4:00 pm (GMT) when the New York and London Stock Exchanges are open
- 12:00 PM to 7:00 AM (GMT) when the Tokyo and Sydney Stock Exchanges are open
- 8:00 a.m. to 9:00 a.m. (GMT) when the Tokyo and London Stock Exchanges are open
The first of these windows, between New York and London, is perhaps the most important. These two centers account for more than half of all Forex trades.
Looking at the average pip number movement of the major currency pairs in each forex trading session, we can see that the London session has seen the most movement.
|the pair||Tokyo||London||New York|
In fact, the best time to trade forex will depend on the currency pair you are following. Generally, the most liquidity for each currency pair occurs when the pair’s sessions overlap – if both slots are open at the same time. For example, the GBP/USD pair will experience higher trading volume when the London and New York sessions are open.
It is also important to know that high trading activity leads to high volatility. While some traders appreciate the opportunities that volatility can provide, others do not – either way, having a risk management strategy is essential.
Rebecca Catlin, Forex.com » Official site
Disclaimer: The information and opinions contained in this report are provided for general information only and do not constitute an offer or solicitation to buy or sell forex exchange contracts or CFDs. Although the information contained herein has been obtained from sources believed to be reliable, the author does not guarantee its accuracy or completeness, and assumes no responsibility for any direct, indirect or consequential damages incurred by anyone relying on such information.