The foreign exchange market (forex) is a global decentralized market where currencies are traded. It is the largest financial market in the world, with an average daily trading volume of $5.3 trillion as of April 2013. Forex trading is available 24 hours a day, five days a week, with trading sessions starting on Sunday at 5:00 p.m. EST and ending on Friday at 5:00 p.m. EST.
Forex Trading Sessions
Forex trading sessions are divided into four major trading sessions: the Sydney session, the Tokyo session, the London session, and the New York session. Each of these sessions has its unique characteristics and trading opportunities.
1. Sydney Session
The Sydney session is the first trading session of the forex market, and it begins at 5:00 p.m. EST on Sunday and ends at 2:00 a.m. EST on Monday. This session is characterized by low trading volumes and volatility, as most of the major financial markets are closed during this time. However, traders can still take advantage of the opening of the Asian markets and the release of economic data from Australia, New Zealand, and Japan.
2. Tokyo Session
The Tokyo session begins at 7:00 p.m. EST and ends at 4:00 a.m. EST. This session is characterized by higher trading volumes and volatility compared to the Sydney session, as the Japanese financial markets are open during this time. Traders can take advantage of the volatility in the Japanese yen pairs, as well as the release of economic data from Japan.
3. London Session
The London session is considered the most important trading session, as it is the largest financial center in the world. It begins at 3:00 a.m. EST and ends at 12:00 p.m. EST. This session is characterized by high trading volumes and volatility, as the European financial markets are open during this time. Traders can take advantage of the volatility in the euro and pound pairs, as well as the release of economic data from the Eurozone and the UK.
4. New York Session
The New York session is the last trading session of the day, and it begins at 8:00 a.m. EST and ends at 5:00 p.m. EST. This session is characterized by high trading volumes and volatility, as the US financial markets are open during this time. Traders can take advantage of the volatility in the US dollar pairs, as well as the release of economic data from the US.
Forex Market Hours
Forex market hours vary depending on the trading session. The Sydney and Tokyo sessions are open from Sunday to Thursday, while the London and New York sessions are open from Monday to Friday. However, there are overlaps between these sessions, which provide traders with the opportunity to trade during high trading volumes and volatility.
1. Sydney and Tokyo Overlap
The Sydney and Tokyo overlap occurs from 7:00 p.m. EST to 2:00 a.m. EST. This overlap provides traders with the opportunity to trade the AUD/JPY and NZD/JPY pairs, as well as the release of economic data from Australia, New Zealand, and Japan.
2. London and Tokyo Overlap
The London and Tokyo overlap occurs from 3:00 a.m. EST to 4:00 a.m. EST. This overlap provides traders with the opportunity to trade the GBP/JPY and EUR/JPY pairs, as well as the release of economic data from the Eurozone and the UK.
3. London and New York Overlap
The London and New York overlap occurs from 8:00 a.m. EST to 12:00 p.m. EST. This overlap provides traders with the opportunity to trade the EUR/USD and GBP/USD pairs, as well as the release of economic data from the Eurozone and the US.
4. New York and Tokyo Overlap
The New York and Tokyo overlap occurs from 7:00 p.m. EST to 12:00 a.m. EST. This overlap provides traders with the opportunity to trade the USD/JPY pair, as well as the release of economic data from the US and Japan.
Conclusion
In conclusion, the forex market is open 24 hours a day, five days a week, with trading sessions starting on Sunday at 5:00 p.m. EST and ending on Friday at 5:00 p.m. EST. Forex trading sessions are divided into four major trading sessions: the Sydney session, the Tokyo session, the London session, and the New York session. Traders can take advantage of the trading opportunities provided by the overlaps between these sessions, as well as the release of economic data from different countries.
