Unlike Wall Street, the Forex markets are open 24 hours a day, 5 days a week. This provides traders with a huge window of potential trading time to work with, which can be both a blessing and a curse.
Many new traders get hooked to the screen, morning, noon, and night searching for every small edge they can find and entering hundreds of positions each and every day.
While this can be a profitable strategy, it is highly unlikely that it can remain profitable over the long run as you will inevitably run into trading burnout.
As always in life, quality over quantity.
With that being said, the main appeal of forex is its availability and accessibility on a global scale.
No matter where you are in the world you will likely be able to trade the foreign exchange during sociable hours – something which cannot always be said for the other international markets.
The major trading centres for forex around the globe are London, New York, Tokyo, and Sydney. The diversity of these geographical locations is what makes forex a 24-hour market.
Each of the four regions have their own official hours. It is important to be aware of these as it can affect the volume traded and the volatility of the currency associated with that nation’s currency.
Let’s take a look at these four trading centres and their opening times. All times are in GMT (Greenwich Mean Time).
- London – 08:00 – 17:00
- New York – 13:00 – 22:00
- Sydney – 22:00 – 07:00
- Tokyo – 00:00 – 09:00
NOTE: These times vary throughout the year based on daylight savings times.
Forex trading sessions
As you can see from the times above, there are overlaps between the opening hours which is what leads to forex’s 24-hour market. However, not all of the 24 hours in the day are made equal when it comes to forex.
When it comes to trading, it is important to take note of volatility. This what traders thrive off as it means the price is moving around aggressively and thus there are more opportunities to take advantage of.
Each of these opening hours signifies the start of a new trading session. During these official hours, trading the currency associated with each region brings increased volatility and bigger price movements.
Here are the currencies associated with each trading session.
- UK & Europe – British Pound (GBP), Euro (EUR), Swiss Franc (CHF)
- US & Canada – US Dollar (USD), Candian Dollar (CAD)
- Australasia – Australian Dollar (AUD), New Zealand Dollar (NZD)
- Japan – Japanese Yen (JPY)
When is the best time to trade Forex?
Forex prime time is typically thought to be between 13:00-17:00.
This is considered to be the best time of the day trade the foreign markets as this is when five of the major currencies are all being actively traded simultaneously – GBP, EUR, CHF, USD, and CAD.
When there is more activity there is more volatility which provides a greater number of profitable trading opportunities that we can take advantage of.
TIP: The first hour of each new trading session usually brings the highest volatility as traders will be scrambling to react to out of hours events.