Forex trading is a global market that operates 24 hours a day, five days a week, from Monday to Friday. The forex market is the largest and most liquid financial market in the world, with an estimated daily trading volume of $5.3 trillion. The forex market is not centralized, and trading takes place in different time zones around the world. As a result, the forex market operates continuously, with trading sessions opening and closing at different times throughout the day.
Forex trading hours are divided into four major trading sessions, which include the Sydney session, the Tokyo session, the London session, and the New York session. Each trading session has its unique characteristics, and traders must understand the different trading sessions’ characteristics to maximize their trading opportunities.
The Sydney session is the first forex trading session to open, and it starts at 10 pm GMT on Sunday and closes at 7 am GMT on Monday. The Sydney session is the smallest forex trading session, accounting for only 4% of the total daily trading volume. However, the Sydney session is essential because it sets the tone for the rest of the trading day, and traders should pay attention to any market-moving news released during this session.
The Tokyo session is the second forex trading session to open, and it starts at 12 am GMT and closes at 9 am GMT. The Tokyo session is known for its volatility, as it overlaps with the Sydney session and the London session. The Tokyo session is also known for its high trading volume, accounting for about 21% of the total daily trading volume. The Tokyo session is particularly important for traders who trade the Japanese yen, as most of the yen’s trading activity takes place during this session.
The London session is the third forex trading session to open, and it starts at 8 am GMT and closes at 5 pm GMT. The London session is the most significant forex trading session, accounting for about 35% of the total daily trading volume. The London session is also known for its volatility, as it overlaps with the Tokyo session for a few hours. The London session is particularly important for traders who trade the British pound, as most of the pound’s trading activity takes place during this session.
The New York session is the fourth and final forex trading session to open, and it starts at 1 pm GMT and closes at 10 pm GMT. The New York session is the second most significant forex trading session, accounting for about 17% of the total daily trading volume. The New York session is also known for its volatility, as it overlaps with the London session for a few hours. The New York session is particularly important for traders who trade the US dollar, as most of the dollar’s trading activity takes place during this session.
Outside of these major trading sessions, forex trading can still take place, but the trading volume is usually lower, and the market may be less liquid. The time between the New York session’s close and the Sydney session’s open is known as the weekend gap, and traders should be aware of any news released during this time that could affect their trading positions.
In conclusion, the forex market is a global market that operates 24 hours a day, five days a week, from Monday to Friday. The forex market is divided into four major trading sessions, which include the Sydney session, the Tokyo session, the London session, and the New York session. Each trading session has its unique characteristics, and traders must understand the different trading sessions’ characteristics to maximize their trading opportunities. Outside of these major trading sessions, forex trading can still take place, but the trading volume is usually lower, and the market may be less liquid.
