The foreign exchange market, commonly known as Forex or FX, 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, excluding weekends and public holidays. Forex trading opens on Sunday at 5 pm Eastern Time (ET) and closes on Friday at 5 pm ET. However, the market may close early on some days due to scheduled or unscheduled events.
Forex trading is a decentralized market that operates globally, with participants from different time zones around the world. As a result, there is no central exchange or standard opening and closing time. Instead, Forex trading is conducted through a network of banks, financial institutions, and individual traders who connect electronically and trade currencies around the clock.
The Forex market is divided into four major trading sessions: the Sydney session, the Tokyo session, the London session, and the New York session. Each session has its unique characteristics and trading hours, which overlap with each other, providing continuous trading opportunities for traders.
The Sydney session opens at 5 pm ET on Sunday and closes at 2 am ET on Monday. This session is relatively quiet, with low volatility and limited trading activity, as most major financial centers are closed.
The Tokyo session starts at 7 pm ET and ends at 4 am ET. This session is known for its high liquidity and volatility, as it overlaps with the Sydney session and coincides with the opening of major financial markets in Asia.
The London session opens at 3 am ET and closes at 12 pm ET. This session is considered the most important and active session, as it overlaps with the Tokyo session and coincides with the opening of major financial centers in Europe. The London session accounts for over 35% of the total daily trading volume in the Forex market.
The New York session starts at 8 am ET and closes at 5 pm ET. This session is also highly active and accounts for about 20% of the daily trading volume. It overlaps with the London session for several hours, providing significant trading opportunities for traders.
Although the Forex market operates 24 hours a day, not all currency pairs are equally active during all trading sessions. For instance, the AUD/USD pair is more active during the Asian session, while the EUR/USD and GBP/USD pairs are more active during the London and New York sessions.
It is important to note that Forex market hours may vary during daylight saving time (DST). Some countries observe DST, which means that their clocks are adjusted forward by one hour during the summer months. As a result, Forex trading hours may shift by one hour during DST periods, depending on the country’s time zone.
In conclusion, the Forex market operates 24 hours a day, five days a week, with trading sessions that overlap with each other, providing continuous trading opportunities for traders. The market opens on Sunday at 5 pm ET and closes on Friday at 5 pm ET, but may close early on some days due to scheduled or unscheduled events. Understanding the Forex market hours and trading sessions is crucial for traders to make informed trading decisions and take advantage of market opportunities.
