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Everyone wants to know when is the best time to trade currencies. However, with a market that scarcely sleeps, daylight saving time, and exchanges in multiple time zones to consider, determining when to trade forex may be difficult.
As a result, it’s critical to grasp the numerous forex sessions – and, more critically, when they’re open for business.
The currency exchange market is open 24 hours a day, seven days a week. Financial institutions such as hedge fund managers, large central banks, businesses, and investment managers are among those that trade it. Then there are the typical Joe Traders, sometimes known as retail customers.
To keep the foreign currency markets open practically constantly, exchanges will cross over, opening and closing at different times of the day throughout the week. As a result, it can be difficult to determine when it is ideal to trade currencies and which markets will be open or most volatile in your time zone.
Global Forex Market Sessions
To keep things easy, we’ll use GMT as the normal time zone throughout this article.
Markets always open and close at different times. With this in mind, the four most important market sessions throughout the world are shown below. Importantly, you will observe that each market overlaps by at least one hour — keeping the wheels turning.
The Asian markets, sometimes known as the ‘Tokyo sessions,’ begin off the trading week. The Tokyo capital markets open at 00:00 and close at 06:00. Notably, the beginning and finish of Asian market sessions are typically stretched beyond the Tokyo sessions.
This is usually open from 23:00 to 08:00. This is to accommodate the activity of scattered markets in Russia, New Zealand, China, and Australia, all of which are active at the moment.
AUD/USD, USD/JPY, and NZD/USD are some of the prominent pairings that are often traded during Asian sessions. As a result, if you trade a currency pair that contains JPY, you will observe substantially higher volumes during these hours.
Europeans come awake just before the closure of the aforementioned Asian markets. While the official hours for London are 07:30 to 15:30, the sessions stretch from 07:00 until 16:00. This is to accommodate the presence of other exchanges such as Germany, France, and others.
The overlap between London and New York forex market hours is often regarded as the optimum period to acquire insight into the direction and volatility of currencies for the trading day. As a result, many forex traders prefer to wait until the Tokyo and Sydney markets shut and the London market opens.
The North American forex markets open several hours after the Asian markets close and around midway through the European sessions. Taking financial futures, economic releases, and commodities into account — these markets open at 12:00.
As a result, there is a significant time lag between when the American markets close and when the Asian markets reopen. The New York Stock Exchange officially closes at 20:00.
The Sydney markets open at 21:00, soon after the NYSE closes, and close at 05:00. At that period, the Tokyo markets are operational.
The Sydney market hours are frequently seen as the least volatile, making them unsuitable for short-term traders interested in scalping and other similar activities.
When trading forex, the obvious end aim is to profit by correctly timing the markets. As a result, knowing when one session ends and another begins will be quite beneficial, as you will be able to measure volatility and other factors based on your selected FX pair.
In addition to calculating out the forex market hours in a way that is relevant to your individual time zone, it is also vital to consider how any changes in Daylight Saving Time might alter the starting and closing hours of a session. As a result, you’ll need to alter any price chart periods you’re looking at accordingly.