The forex market, also known as the foreign exchange market, is open 24 hours a day, five days a week. It is the largest financial market in the world, with a daily turnover of over $5 trillion. The forex market is open for trading from Sunday night to Friday night, allowing traders to access the market at any time from anywhere in the world. In this article, we will explore the forex market’s trading hours, including the different trading sessions and the best times to trade.
Forex Market Trading Sessions
The forex market is open 24 hours a day, but the trading activity is divided into four major sessions: the Sydney session, the Tokyo session, the London session, and the New York session. Each session has its own unique characteristics and trading opportunities.
1. Sydney Session
The Sydney session starts at 10 p.m. GMT and ends at 7 a.m. GMT. This session is the least volatile of all the sessions, and it accounts for only 4% of the total trading volume. The major currency pairs traded during this session are AUD/USD, NZD/USD, and USD/JPY.
2. Tokyo Session
The Tokyo session starts at 12 a.m. GMT and ends at 9 a.m. GMT. This session is the most liquid of all the sessions, accounting for 21% of the total trading volume. The major currency pairs traded during this session are USD/JPY, EUR/JPY, and GBP/JPY.
3. London Session
The London session starts at 8 a.m. GMT and ends at 5 p.m. GMT. This session is the most active of all the sessions, accounting for 38% of the total trading volume. The major currency pairs traded during this session are EUR/USD, GBP/USD, and USD/CHF.
4. New York Session
The New York session starts at 1 p.m. GMT and ends at 10 p.m. GMT. This session is the second most active of all the sessions, accounting for 17% of the total trading volume. The major currency pairs traded during this session are USD/JPY, EUR/USD, and GBP/USD.
Best Times to Trade Forex
The best time to trade forex is during the overlap of two trading sessions. This is when the trading activity is the highest, and the market is the most volatile. The most important overlap is between the London and New York sessions, which occurs between 1 p.m. GMT and 5 p.m. GMT. During this time, the trading volume is at its peak, and the major currency pairs are the most active.
Another good time to trade forex is during the Tokyo session, especially when there is an economic release from Japan or China. This can cause a significant move in the market, providing traders with trading opportunities.
On the other hand, the Sydney session is the least volatile of all the sessions, making it less attractive to traders. However, traders who prefer to trade the AUD/USD or NZD/USD pairs may find this session more suitable.
Weekend Trading
The forex market is closed on weekends, but traders can still access the market through electronic trading platforms. However, the liquidity is low during this time, and the spreads are wider. Weekend trading is more suitable for long-term traders who are not concerned about short-term price movements.
Conclusion
In conclusion, the forex market is open 24 hours a day, five days a week. The trading activity is divided into four major sessions: the Sydney session, the Tokyo session, the London session, and the New York session. The best time to trade forex is during the overlap of two trading sessions, especially between the London and New York sessions. Traders who prefer to trade the AUD/USD or NZD/USD pairs may find the Sydney session more suitable. Weekend trading is more suitable for long-term traders who are not concerned about short-term price movements.
