The foreign exchange (forex) market is a decentralized market where currencies are traded 24 hours a day, five days a week. The forex market operates through a global network of banks, financial institutions, and individual traders, making it the largest financial market in the world, with an estimated daily trading volume of $5.3 trillion.
Forex trading starts on Sunday at 5 pm EST when the Sydney session opens, and it closes on Friday at 5 pm EST when the New York session closes. However, forex trading hours vary depending on the region, and traders need to be aware of the different trading sessions to take advantage of market volatility and maximize their profits.
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 traders need to understand the different sessions to choose the best trading time for them.
The Sydney session is the first session to open in the forex market, and it starts at 5 pm EST on Sunday. This session is considered the least volatile session as the market is not fully operational, and most traders are still asleep. However, this session is essential for traders who want to trade the Australian dollar, as it is the only major currency traded during this session.
The Tokyo session starts at 7 pm EST and overlaps with the Sydney session for two hours. This session is known for its high volatility, as it is the time when the Japanese yen is traded. The Tokyo session also overlaps with the London session for one hour, creating a period of increased volatility.
The London session is considered the most active trading session, and it starts at 3 am EST. This session overlaps with the Tokyo session for one hour and with the New York session for four hours, creating a period of high liquidity and volatility. The European currencies, such as the euro, the British pound, and the Swiss franc, are heavily traded during this session.
The New York session starts at 8 am EST and is the last session to open in the forex market. This session overlaps with the London session for four hours, creating a period of high liquidity and volatility. The US dollar is the most traded currency during this session, and traders need to pay close attention to the economic news releases from the US.
In conclusion, the forex market is open 24 hours a day, five days a week, and it 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 traders need to understand the different sessions to choose the best trading time for them. Traders need to pay close attention to the economic news releases from different regions to take advantage of market volatility and maximize their profits.
