Forex Market Hours

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The forex market is always open for 24 hours every single weekday to enable traders to sell and buy all night and day. Understanding the operating hours is essential for every trader when they are starting. You must also be familiar with the four main forex trading sessions and the opening and closing times. 

A vital tip is to track your Forex Market Time Zone Converter. It will show the open trading sessions in your current local time.

What are the four major forex exchanges?

The four major foreign market exchanges are in; New York, London, Tokyo, and Sydney. As a trader, it is crucial to commit your hours to memory, paying attention to the hours when two exchanges overlap at any given time. Whenever multiple exchanges are open simultaneously, the trading volumes rise, and so does the volatility. 

This rate and extent of currency price fluctuations can be beneficial, which may come to you as a surprise because, generally, volatility is not desirable in the investment market. However, in the forex market, things are different since increased volatility translates to higher payoff opportunities.

Global FX hours

The foreign exchange market is fully electronic and open at a certain point on earth, between 5 p.m. Sunday and 5 p.m. Friday EST (Eastern Standard Time). Each of the four major exchanges has its own specific trading hours from Monday to Friday. On average, the most important windows in the Forex Market are:

  • New York: 8 a.m. – 5 p.m.
  • London: 3 a.m. – 12 p.m. 
  • Tokyo: 7 p.m. – 4 a.m.
  • Sydney: 5 p.m. – 12 a.m. 

Although each exchange is independent, they trade the same currencies. Therefore, whenever two exchange markets are open, the number of active parties trading in a given currency increases tremendously. The asks and bids in one exchange will immediately affect those on the other open forex market exchanges. The results are a reduction in market spreads and increased volatility. 

Typically, the affected windows are:

  • 3 a.m. to 4 a.m., where the Tokyo and London exchanges are both open
  • 8 a.m. to noon, where the New York and London exchanges are both open
  • 7 p.m. to 2 a.m., where the Tokyo and Sydney exchanges are both open

The New York Market is crucial to foreign investors because it involves the U.S. dollar. 90% of all trades involve the dollar, and its movements could potentially have a strong ripple effect worldwide.

What time should you trade?

Although you can trade the forex market at any time, it doesn’t mean that you should. Trading during certain times is better compared to others. In theory, the best time to trade would be when the volume of trades happening at a given time is at its highest. That is when the market is most active.

This period is ideal since it provides tighter spreads and higher liquidity. You want to trade when open markets are overlapping. Ideally, when the London and New York sessions overlap. Also, consider the London market, especially in the middle of the trading week. After all, it is the busiest.

The bottom line

Same as other investment opportunities, there is money to be made in the forex market. Just ensure that you educate yourself adequately to minimize the chances of losing. Remember that your trading success will also depend on the number of successful trades and the magnitude of each successful trade. Start with trading for 2 hours at the peak of the sessions and build from there.

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