Forex Market Hours

Although the advent of connectivity platforms and the meteoric rise of decentralized blockchain-based assets have recently challengedThe the concept of the world’s reserve currency, so far, the U.S. dollar remains king. Of course, this dynamic does not mean that the rest of the global financial sector marches to an American cadence.

Instead, demand for the greenback awakens just as U.S. investment sessions close for the day. Enter the wild and often unpredictable world of foreign exchange and the underlying dynamism of forex market trading hours. Thanks to a distinctive profile of demand structures and geographical realities, forex session times essentially feature 24-hour trading.

This article discusses forex market hours and optimal times to trade the forex market.

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Understanding Forex Market Hours

The forex market operates 24 hours a day on weekdays, allowing participants worldwide to buy, sell, exchange, and speculate on global currencies. It remains closed on weekends due to its global nature across different time zones.

The market opens on Sunday at 5 p.m. New York time and closes on Friday at 5 p.m., resuming 48 hours later to start a new trading week. While the market is open, traders worldwide can execute trades, though trading conditions may vary depending on the active session.

4 Major Forex Market Sessions

Although each nation tied to the global financial sector operates under its distinct time zone, the bulk of forex market trading occurs in these four regions.

Sydney

Taken as a whole, forex market trading hours begin in Sydney at 5:00 pm EST. Along with the Tokyo market below, traders consider Sydney’s opening bell as the beginning of the Asian session. Combined with other Asian markets such as Hong Kong and Singapore, the Asian session contributes approximately 21% of all forex transactions.

Tokyo

Representing the financial hub undergirding the world’s third-largest economy, the Tokyo market represents a key zone within forex market trading hours. Tokyo opens at 7:00 pm EST and the yen currency is the most traded currency in the wider Asian session, covering 16.5% of all forex transactions.

London

Next to open is the London market, basically the crown jewel of forex market hours. London opens at 3:00 am EST and has huge trading volume, over 32% of forex transactions occur in the capital city of England.

New York

Last but certainly not least, New York represents the caboose of forex market hours. New York opens at 8:00 am EST and 19% of all forex transactions occur in the Big Apple, with 85% of forex trades involving the dollar.

Understanding Forex Market Sessions

Each market zone also features a distinctive trading personality. For instance, the Asian trading session at times features low liquidity. However, the price action can start moving as fundamental catalysts from Australia, New Zealand and Japan materialize.

During the London trading session, volatility can be a bear to wrestle with until the middle of the period. That’s because most traders take some time off for lunch, potentially enabling retail traders to catch their breath.

Closer to home, the New York session tends to feature high liquidity in the morning hours, when it overlaps with the twilight of the London trading session. However, relatively little movement occurs toward the afternoon hours, particularly near Friday’s closing bell.

Most Important Forex Market Hours

While forex trading session times encompass the full breadth of the 24-hour clock, it doesn’t trade every single day. Saturday provides a rare respite while the market picks back up again on Sunday. Below is the schedule for the main forex market trading hours.

• Sydney: Opens at 5 pm EST, closes at 2am EST
• Tokyo: Opens at 7 pm, closes at 4 pm EST
• London: Opens at 3 am, closes at 12 pm EST
• New York: Opens at 8 am, closes at 5 pm EST

Unlike a music festival where one act will follow another following the earlier group’s conclusion, forex session times feature overlaps with other regions. Professional traders prefer participating during these overlapping hours because of the increased volatility. Without market velocity, traders find it difficult to extract net returns for their speculative activities. As well, higher liquidity tends to yield narrower bid-ask spreads, thus making it easier for traders to generate net profits.

• Sydney and Tokyo: The overlap occurs quickly as after two hours of trading in the Sydney session, Tokyo opens its doors.
• Tokyo and London: While not technically an overlap (Tokyo closes while London opens at 3 am EST), British traders can accrue significant data from both the Tokyo and Sydney forex session times, thus providing potential preparatory research.
• London and New York: London overlaps with New York between 8 am and 12 noon EST. Therefore, the first four hours in New York tend to be the wildest in terms of volatility.

Finally, keep in mind that according to the Bank for International Settlements (BIS) — an international organization that fosters international monetary and financial cooperation — forex market trading features a daily transaction amount of $7.5 trillion (April 2022). Thus, professional traders attempt to participate at a time when the bulk of that money swaps hands.

When is the Best Time to Trade Forex?

From an objective standpoint, the best time to trade forex is between 8 am EST to 12 pm EST. Within this period is where the London and U.S. markets overlap, effectively a marriage between the first and second biggest individual forex markets.

Coming in second place would be the period when the Sydney and Tokyo markets overlap. While not as volatile as the trading that occurs during the London/U.S. overlap, the former regions provide ample opportunities for professional and seasoned traders.

Still, the matter of the best time could be a philosophical one. Practically speaking, the best currency exchange hours are the time slots when you can fully focus on the task at hand. Remember, unlike placing long-term orders on blue-chip stocks, forex market hours can be brutal because plenty of action is condensed within a short period of time.

Where to Trade Forex

Continuous Trading Opportunity

The forex market operates 24/7, allowing participants worldwide to engage in currency exchange. Four major markets take turns leading trading activities, and the best times to trade coincide with overlapping sessions. Price swings in the forex market can be unpredictable but are attractive for speculative activities. The best time for forex trades depends on an individual's focus and ability to manage the fast-paced nature of the market.

Frequently Asked Questions