Introduction to Forex Market Hours
The foreign exchange market operates 24 hours a day, five days a week, making it one of the most accessible markets for traders worldwide. Unlike stock markets that have fixed trading hours, forex trading begins in Sydney on Sunday evening (EST) and closes in New York on Friday evening.
The Four Major Trading Sessions
Sydney Session (10:00 PM - 7:00 AM GMT)
The Sydney session kicks off the trading week. While it's the smallest of the major sessions in terms of volume, it sets the tone for the day ahead. The Australian Dollar (AUD) and New Zealand Dollar (NZD) pairs are most active during this time.
Tokyo Session (12:00 AM - 9:00 AM GMT)
As the Sydney session winds down, Tokyo picks up. Japan is the third-largest forex trading center, and the Japanese Yen (JPY) sees significant movement during these hours. Pairs like USD/JPY and EUR/JPY experience high liquidity.
London Session (8:00 AM - 5:00 PM GMT)
London is the largest forex trading center in the world, accounting for roughly 35% of all forex transactions. During this session, major pairs involving EUR, GBP, and CHF see their highest volumes.
New York Session (1:00 PM - 10:00 PM GMT)
The New York session overlaps with London for several hours, creating the most liquid and volatile trading period of the day. This is when many traders prefer to execute their strategies.
Understanding Session Overlaps
The most significant trading opportunities often occur during session overlaps:
London-Tokyo Overlap (8:00 AM - 9:00 AM GMT): A brief but active period for EUR/JPY and GBP/JPY pairs.
London-New York Overlap (1:00 PM - 5:00 PM GMT): The most active trading period, with highest volume and volatility. Major news releases often occur during this time.
Best Times to Trade Specific Currency Pairs
Tips for Trading Different Sessions
Conclusion
Understanding forex market hours is fundamental to developing a successful trading strategy. By knowing when different currency pairs are most active and when session overlaps occur, you can optimize your trading schedule and potentially improve your results.
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