Best Forex Market Hours And Trading Time
Forex market hours and trading time are important to identify the best time for a profitable trading environment. To make it easy and understandable, we will break down this article a few phases.
Moreover, we will discuss different forex hours, weekend trading, trade overlapping hours, and others.
We all know that currency trading is not centralized by any authority. Opening the forex market 24 hours does not mean, it will remain active all day long.
In a week, traders can place trades only for 5 days. Each trading day is divided into different trading sessions. On the other hand, the market operates in multiple time zones. So, the trading time-frame will depend on the trader’s zone
Traders can earn a trading profit in both ways, whether the market moves up or down. But you have to discover which trading hour will bring the highest level of achievement, and which will not.
If you are interested to know more about forex trading basics, then you can check our what is forex trading article.
Note that it is impossible to make money when the market does not move at all.
Generally speaking, the most active trading hours depend on when the market gets overlapped. You will get to know about market overlapping at the end of this article.
Forex Market Hours Clock
Opening and closing hours in the forex trading market depends on the local business hours. Different region follows different trading sessions. If one region’s market closes, then another one opens.
Generally, the market opens on Sunday and closes on Friday. The market is only closed two days for retail traders but opens for Central Bank.
On the other hand, except for 2 days, the currency market does not open on national holidays depending on the local time zone. Notably, traders can trade at any time of the day and night.
The Forex market based on one fact that market will always open somewhere around the globe. Each trading day is different from another. There is no guarantee that the trading day will remain the same.
Moreover, the trading volatility is not the same for all time. The market opening and closing hours are different in winter and summer months. Due to different seasons, many countries shift to/from daylight, savings time (DST).
The time changes just 1 hour later in the winter season from the summer times.
Types Of Forex Trading Session
According to the Forex market hours chart, each trading session will open when another session will close. There is also an overlapping hour between New York and London Session.
Asian traders mainly follow Tokyo or Singapore session where European traders generally follow the London session. Furthermore, North American traders follow the New York session.
There are four major trading sessions available. These are
- Sydney Session
- Tokyo Session
- London Session
- New York Session
Let’s have an in-depth look at each session.
Sydney Trading Session:
The trading day starts in New Zealand and Australia. The trade turnover is very slow. But trading becomes more active when Sydney joins into the market.
Besides, the Sydney market is known as the smallest trading market. It is necessary to mention that forex trading hours begin from this market.
It is the least volatile market among all four markets. The Sydney session is the most peaceful market for traders.
Asian Trading Session:
In the first place, Asian or Tokyo trading session is a major trading market hour because of its volatility. Most of the liquid currency pairs like EUR/USD, GBP/USD, EUR/JPY, GBP/JPY etc are traded in this session. At the same time, major pair indicates the good signals in Asian session for a long time.
We got this question from new traders most the time that which trading pair should I trade?
There is no particular rule because the market situation changes over time. The selection of a trading pair depends on the market movement.
Traders get a good opportunity to trade on news events, when news comes from China, Japan, and Australia.
On the other hand, in the Tokyo market, the Bank of Japan has a heavy influence. So, currency pairs like Japanese yen and Chinese Yuan are the best choice for traders.
A decent number of currency transactions happen during the Tokyo session. Furthermore, the pip value remains very high during this session.
In the Tokyo session, China is the major player in the trading market. All types of commercial clients including the central bank, participate in the Asian trading session.
Moreover, you will find a strong movement on Asia Pacific currency pairs, rather than the non-Asia Pacific pairs.
European Trading Session:
London or European market is the heart for all currency traders. The markets open when the Asian market is about to close. It dominates all the currency market around the globe. On the other hand, business transactions are taken places during this session.
In one minute, thousands of Forex transactions occur. Like the Asian market, a few currency pairs GBP/USD, EUR/USD, AUD/JPY etc have the highest amount of trading value.
The pip value, of course, depends on the volatility of the trading pair. At the same time, the London session is the most volatile trading session because of its large amount of transactions.
It is the only session that overlaps with the Tokyo session as well as the New York session.
Traders get a good deal if they continue trading during the European session. Because of its tight spread, traders can full their wallet easily.
On the other hand, in the London session, it is possible to trade any pairs. Besides, a larger amount of traders execute trades when the market has the highest liquidity. But during the mid-time of the session, the volatility remains low.
North American Session:
After London, New York or North American is the second-largest Forex market session for traders. In the middle of the London session, North American market opens.
When the London traders get back from their lunch, the US traders already in the market with bag and baggage.
In the New York session, almost 90% of the traded currency involves US dollars. You will find major difficulties in the New York market in the overlapping hours.
Because of the news events, the market can move during this session. Just before the opening of the North American session, most of the economic indicators and reports are published. Traders need to pay more attention during the overlap time.
As the market is super active, you can earn a huge profit where risk is also involved. Lower volatile currency pairs like EUR/ GBP, USD/JPY, AUD/USD, etc are also active in New York session.
In Friday, the market movement comparatively low then other sessions. The interesting part is that the New York session is about to shut down when the London market is already closed. Mostly American traders are heavily influenced by this session.
Best Forex Trading Time
The best trading time or hours are counted when the market is active. Market overlapping means when 2 or more market is active simultaneously. In the overlapping trading hours, the highest trade volume is performed by the traders.
When two markets open simultaneously, you will find a large volume of trades placed by traders to take liquidity advantage. These are the most active hours when one session overlaps another session.
Moreover, the bid/ask price is narrower in the active trading time.
The Sydney and the Tokyo market overlapping hour is not volatile for traders. Note that EUR/JPY is the ideal pair to trade during these overlapping hours.
The Tokyo and London session’s overlapping time is short. It stays only for 1 hour. Furthermore, traders get very little time to trade with two different currency pairs. Traders perform the least amount of trading during this period. At the same time, the session creates more volatility for traders. The cross currencies are traded the most in this overlapping time. However, it is the lazy hours for traders.
The overlapping time of New York-London session is considered as the best trading hours. It is the peak time to trade the currency pairs and earn profits. There are almost 15 individual Forex exchanges available around the world. All exchanges are active during this overlapping session.
Traders from two enormous financial markets gather here to trade currency pairs. It is important to give priority to the trading news. However, not all news is that much important for traders. You have to categorize news event before trading on that. You can see a big market move when the news events come out.
As we have said earlier, it is the most volatile overlapping hours for traders. Besides, it is the best time to trade the EUR/USD currency pair.
Best trading hours will not make you a billionaire. No doubt, you can lose most of your money in the most volatile market time.
Forex Trading Day And Night Hours
Traders can consider the trading hour’s clock into two parts. One part is for day traders and another part for overnight position holders. Day trading is for those traders who has time to analyze the market during the daylight. Daytime is the most volatile period because all political news broadcasted at this time.
Moreover, in the day time, economic events could be affected by the Forex market. Traders who trade depending on the trading news, often choose the daytime or early evening to place orders.
The people who choose Forex trading as their hobby or a passive income, mostly trade at night. During the night time, both the European and American market is less active.
However, the Asian markets are quite effective at night. The majority of the traders prefer to trade before the news broadcast. On the other hand, in the nighttime, the market remains less volatile.
You can trade multiple pairs at the same time, at the same price chart. It is the best trading time for particular currency pairs
like Yen, Singapore dollar, etc.
Forex Trading Time - Weekend Trading
There is a misconception that traders cannot place an order during the weekends. But fortunately, you will find a few brokers who accept weekend trading.
As previously stated, the Forex market is closed only for retail traders. Retail traders are those who trade to earn money from home. The currency market opens except for national holidays and local holidays.
Moreover, traders need to analyze the market to perform a trade in a weekend. As the market is not fully volatile in the weekend, so traders need to pay a high spread.
Besides, the weekend market is very important because it shows how you will place orders in the next five days. Weekend gaps are the key for traders to decide, whether you can make money with upcoming Forex currency pairs or not.
You can see the differences between the closing trade day prices with the opening price. A lot of trader knows the Forex market opens with a big trading price gap. Finding a very rare price gap in the opening time of the Forex market is usual.
If there is a gap up, traders will go short and if there is a gap down traders will go for long. For retail traders, the Forex market is open between 5 pm EST on Sunday until 5 pm EST Friday.
Forex Trading Hours In South Africa
The Forex market opens 24 hours, 5 days a week. The best time for trading currency market is the overlapping hours as per our previous discussion.
For South Africans traders, the best time to during the London session and the start of the New York session. During these sessions, news events and other trading activities cause a great amount of volatility in the currency market.
If you look for the best trading hours in South Africa, then you have to wait for the market overlap. Traders will find the larger pip movement during the overlapping hours.
Besides for South African traders, the time difference between the UK and South Africa is only 1 hour in March. From October, the time difference stays for 2 hours.
Why Forex Trading Hour Is Important
The market opens 24 hours, which is the biggest advantage of Forex trading hours. You can trade anytime depending on your local trading time.
Also, The market hours are flexible for traders. Traders can set their trading times as per their schedule. You can manage time more efficiently if you know about the Forex trading hours.
Each session has its unique features. Traders can use those features to increase their trading performance.
Finally, the overall article is important if you want to earn profits from the volatile market. It is necessary to know all the principles and strategies of each trading sessions.
With the help of the Forex Market Hour’s tool, it could be easier for you to find out the Forex market opening and closing hours.
Besides, concentrate on the trading activity during the largest forex hours.