Forex, also known as foreign exchange, 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. The forex market is open 24 hours a day, 5 days a week, and operates in different time zones around the world. In this article, we will explore when forex opens and how it works.
Forex Market Hours
The forex market is open 24 hours a day, 5 days a week. It starts on Sunday at 5:00 pm EST (Eastern Standard Time) and closes on Friday at 5:00 pm EST. However, the market does not trade all currencies at the same time. Instead, it operates in different time zones around the world, and each currency has its own trading hours.
The forex market is divided into four major trading sessions: the Sydney session, the Tokyo session, the London session, and the New York session. These sessions overlap, allowing traders to trade currencies around the clock.
Sydney Session
The Sydney session is the first session of the forex market, and it starts at 5:00 pm EST on Sunday. It operates until 2:00 am EST on Monday. This session is known as the “Pacific” session because it covers the Asian markets, including Japan, Australia, and New Zealand.
Tokyo Session
The Tokyo session starts at 7:00 pm EST and ends at 4:00 am EST. It is also known as the “Asian” session, and it covers the Asian markets, including Japan, China, and Singapore. This session is characterized by high volatility, as it overlaps with the Sydney session.
London Session
The London session is the most liquid and active session of the forex market. It starts at 3:00 am EST and ends at 12:00 pm EST. This session covers the European markets, including the UK, Germany, and France. The London session is characterized by high liquidity and volatility, as it overlaps with the Tokyo session.
New York Session
The New York session is the last session of the forex market. It starts at 8:00 am EST and ends at 5:00 pm EST. This session covers the North American markets, including the US and Canada. The New York session is characterized by high liquidity and volatility, as it overlaps with the London session.
When to Trade Forex
The best time to trade forex depends on the currency pair you are trading and your trading strategy. If you are trading a currency pair that involves the US dollar, the best time to trade is during the New York session, as the US dollar is the most actively traded currency in the world. If you are trading a currency pair that involves the euro, the best time to trade is during the London session, as the euro is the most actively traded currency in the European markets.
It is also important to consider the economic calendar when trading forex. Economic news releases can have a significant impact on the forex market, and traders should avoid trading during high-impact news releases, such as the non-farm payroll report or the Federal Reserve interest rate decision.
Conclusion
Forex is a global decentralized market where currencies are traded. The forex market is open 24 hours a day, 5 days a week, and operates in different time zones around the world. The market is divided into four major trading sessions: the Sydney session, the Tokyo session, the London session, and the New York session. The best time to trade forex depends on the currency pair you are trading and your trading strategy. Traders should also consider the economic calendar when trading forex.
