Forex Market Hours and Trading Sessions

Get to Know Forex Market Hours and Trading Sessions

The Forex market has a daily trading volume of 4 trillion dollars, making it the biggest financial market in the world. Part of the reason for this is the Forex market hours, which are around the clock. Trading sessions continue on a daily basis, only breaking for weekends. During this time, Forex traders are allowed to buy, sell, exchange, and speculate on markets.

The reason the Forex market is almost always open, is because it is International, operating in every single time zone. It is always office hours somewhere in the world. But certain times are highly active, while other times are remarkably slow. These are called trading sessions.

Most Active Trading Hours

Despite being open 24/5, there are certain hours which are more active.

These include (all times EST):

❏ New York: 08:00-17:00

❏ Tokyo 19:00-04:00

❏ Sydney 17:00-02:00

❏ London 03:00-12:00

Be aware of trading sessions

The major currency pairs are active over very specific time periods. This is due to the selective demographics who trade in these pairs. And while a 24-hour market offers an advantage as being constantly accessible, this comes with its pitfalls. A trader cannot be focused on the Forex markets all the time, and needs to decide which times are most appropriate for the currencies s/he is trading.

There are 3 major trading sessions:

Asian
European
North American

These are commonly known as the Tokyo, London, and New York sessions.

(1) Asian or Tokyo trading session

The Asian markets are the first to observe action after the weekend. This is because of their position on the globe. In other words, their time zone makes them the first to enter the new week. The Tokyo capital markets are live from 00:00-06:00 GMT. There are other countries with considerable pull present during the Tokyo session, including Australia, New Zealand, China, and Russia.

The Asian session generally runs longer hours, in order to overlap with the rest of the world.

(2) European or London trading session

Just before the Asian trading hours come to a close, the European session becomes most active. This trading session is very dense, and involves a number of key financial markets. The official business hours in London run between 07:30-15:30 GMT, and the European session generally runs from 07:00-16:00 GMT.

(3) North American or New York trading session

The North American session comes online when the Asian markets have already been closed for a couple of hours. However, the European session is still in the middle of its day. This session is heavily influenced by the US, with contributions from Canada, Mexico and some countries in South America.

This session usually lasts from 12:00-20:00 GMT.

Overlaps in Forex sessions

Asian/European overlaps account for heavy hours of trading of certain currency pairs, such as GBP/JPY and EUR/JPY. Trying to set a position during these hours will likely lead to a poor entry price, which is significant for long-term traders. On the other hand, short-term traders can use the heightened volatility to their advantage.

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