The foreign exchange (forex) market is the largest financial market in the world, with a daily trading volume of over $5 trillion. It operates 24 hours a day, five days a week, from Sunday evening to Friday evening. But what time does the forex market open, and what pairs should you trade?
Forex Market Opening Times
The forex market is open 24 hours a day, five days a week, but that doesn’t mean that all currency pairs are available to trade at all times. The forex market is split into three major trading sessions: the Asian session, the European session, and the US session.
The Asian session starts at 9 pm GMT on Sunday evening and lasts until 8 am GMT on Monday morning. During this time, the major currency pairs involving the Japanese yen, such as USD/JPY, EUR/JPY, and GBP/JPY, are the most active.
The European session starts at 8 am GMT and lasts until 5 pm GMT. This session is the most active and volatile, with the most significant trading volumes. During this time, the major currency pairs, such as EUR/USD, GBP/USD, and USD/CHF, are the most active.
The US session starts at 1 pm GMT and lasts until 10 pm GMT. This session overlaps with the European session, which means that there is significant trading volume during this time. The major currency pairs involving the US dollar, such as USD/CAD, USD/CHF, and USD/JPY, are the most active.
What Pairs Should You Trade?
There are over 180 currency pairs available to trade in the forex market. However, not all of them are actively traded or suitable for every trader. Here are some of the most popular currency pairs that you should consider trading.
1. EUR/USD
The EUR/USD is the most actively traded currency pair in the forex market, accounting for about 30% of the total trading volume. It represents the euro against the US dollar and is affected by various economic and political factors, such as interest rates, inflation, and geopolitical events.
2. USD/JPY
The USD/JPY is the second most actively traded currency pair, representing the US dollar against the Japanese yen. It is known for its high liquidity and volatility, making it attractive to both short-term and long-term traders.
3. GBP/USD
The GBP/USD, also known as the cable, is the third most actively traded currency pair. It represents the British pound against the US dollar and is affected by various economic and political factors, such as Brexit, interest rates, and inflation.
4. USD/CHF
The USD/CHF represents the US dollar against the Swiss franc and is known for its low volatility and high liquidity. It is often used as a safe-haven currency during times of economic uncertainty.
5. AUD/USD
The AUD/USD represents the Australian dollar against the US dollar and is affected by various economic factors, such as commodity prices, interest rates, and economic growth. It is popular among traders who are interested in trading the commodity currencies.
Conclusion
The forex market is a 24-hour market that operates five days a week, starting from Sunday evening to Friday evening. The major trading sessions are the Asian session, the European session, and the US session. The most actively traded currency pairs include the EUR/USD, USD/JPY, GBP/USD, USD/CHF, and AUD/USD. When trading forex, it is essential to choose the currency pairs that suit your trading style and risk appetite.
