Forex market hours and the best time to trade FX
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Skilling Writers Team
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- Trading
- Finance
Forex market hours are essential for traders to buy, sell, and speculate on currencies. Unique to Forex trading is its 24-hour operation from Sunday to Friday. These trading hours are divided into three main sessions: Asian (Tokyo), European (London), and North American (New York). Understanding these hours is key to aligning trading strategies with market dynamics.
Forex market hours are the hours by which Forex traders can buy, sell, and speculate on currencies. One of the most interesting aspects of Forex trading is that it can be carried out on a 24-hour basis, from Sunday through to Friday. These trading hours can be more easily understood by dividing the trading day into three main sessions.
These are the:
- Asian (Tokyo)
- European (London)
- North American (New York) sessions.
Traders and investors can enjoy Forex trading anytime since these sessions span multiple time zones.
It makes sense to choose trading times that suit your strategies and the currencies you want to deal with. Let’s take a look at the main issues around Forex trading hours that you should take into account.
The best time to trade Forex
Since the Forex market is most active during the market overlaps (open for more than one session at the same time) these are usually known as the best Forex trading hours.
When there are more FX traders engaged in the market, there is a higher likelihood of price movement in currency pairs and more opportunities to profit from, but keep in mind that increased volatility may also result in higher risk.
To decide on the ideal Forex trading hours for your needs, you need to first determine what Forex pairs you want to trade:
- The Forex hours for the major currencies such as the US dollar (USD) and euro (EUR) are traded 24 hours a day around the planet!
- Less widely-traded currencies may only be available in certain regions, each of which follows different Forex hours according to their own timetables.
- You might also see other sessions mentioned such as the Forex market hours of Frankfurt and Sydney, among the other leading centers.
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01/07 - 05/07
YFIUSD: 00:00 - 21:00 UTC
NZDJPY: 00:00 - 21:00 UTC
| Forex Market Session | Trading Hours (GMT) | Key Markets Included |
|---|---|---|
| Tokyo | Midnight - 9 AM | Japan, Russia, China, Australia |
| London | 8 AM - 4 PM | UK, France, Germany, other European countries |
| New York | 1 PM - 10 PM | USA, Canada, Latin American countries |
- Note: Trading hours are subject to daylight saving time adjustments.
Bear in mind that the currencies in each region are most heavily traded at the times that the session of that region is open. Therefore, if you want to trade the Japanese Yen (JPY) or the Russian Ruble (RUB), choosing the Forex hours of the Asian session as your ideal trading hours makes sense.
These sessions are when all the major financial institutions are working, so there is a greater level of volatility in currency trading and more opportunities to benefit from price swings. Major announcements by central banks and other institutions can cause massive reactions in the market, and this is the kind of thing that FX traders are looking out for.
The difference between Forex hours and other market hours
There are some key factors that make Forex trading hours different from other markets such as shares, commodities, and indices. The overall reason for this is that most other instruments are traded on specific exchanges that have defined opening and closing hours.
For example, what if you want to buy or sell shares from BP, Barclays, Rolls Royce, or other companies listed on the UK100 exchange in London? In this case, you need to carry out the transactions between 8am and 4.30pm, which is when the London Stock Exchange is open.
On the other hand, Forex trading isn’t carried out on a single exchange. Rather, it is done by a huge number of brokers around the planet. Forex brokers are constantly posting new bid and ask prices for different currency pairs, making the Forex market highly fluid and liquid.
How your trading style affects the best time to trade FX
Your chosen trading style and strategy will also have an effect on the Forex trading hours that you work within. As we have seen, most opportunities tend to appear in the busiest periods when each region is open for its Forex hours session. Based on your trading style you may want to consider the following to determine your Forex hours strategy:
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Scalpers A scalper will often find trading opportunities when the North American market opens. This coincides with the European session being open and can lead to highly volatile conditions in the early moments of trading in New York. Scalpers may also find success at the relatively quiet period when New York trading is ending and small swings can be sought with a sense of calm. |
Day traders The period of overlap between European and North American sessions is also a good time for day traders. This is when around half of all trades are carried out, but there is still time to trade out of the position carefully during the rest of the day. |
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Swing traders Swing traders may hold positions for several days or weeks, so there isn’t the same urgency to buy and sell on the same day. They will also tend to carry out their trades during the busiest periods when one or more markets are open, using the pre and post-market hours to analyse the situation. |
Position traders Finally, position traders are more concerned with the longer-term picture than short-term volatility. This means that they spend a lot of time carrying out fundamental analysis and don’t need to worry so much about working during the busiest periods. |
How main events impact the best time to trade FX
When considering the key Forex hours, we also need to take into account the main events that can affect currencies around the planet. These events tend to be linked to the opening Forex hours in each region’s sessions.
- Inflation rate announcements.
- When the government announces the latest inflation rate, Forex traders are among the most-interested listeners. Falling inflation rates tend to make a currency rise in value.
- Interest rate changes.
- When a central bank, such as the Bank of England or the Federal Reserve, announces a change to their interest rates their currency will usually be affected. In general terms, rising interest rates will lead to a currency gaining value.
- Political stability.
- Any signs of political instability will be closely watched by Forex traders, who would normally expect a currency to decline in value if a country is going through a period of turmoil.
- Other financial events.
- Announcements regarding a nation’s debt level, growth, or balance of payments are all crucial bits of information for currency traders.
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- With a clear understanding of the main aspects of Forex trading hours in mind, set your trading hours and start trading!
FAQs
- What time does Forex close on Friday?
- Forex markets close at 10:00 PM GMT on Friday. However, the exact closing time can vary slightly depending on the broker and the specific market.
- What hours is the Forex market open?
- The Forex market operates 24 hours a day from Sunday 10:00 PM GMT to Friday 10:00 PM GMT. It's divided into three main sessions: Asian, European, and North American, each with specific operating hours.
- What hours does the Forex market open on Sunday?
- The Forex market opens for the week at 10:00 PM GMT on Sunday. This marks the start of the Asian trading session, which is the first to open for the week.
- When do US stock markets open?
- The US stock markets, including the New York Stock Exchange (NYSE), open at 9:30 AM Eastern Time (ET) and close at 4:00 PM ET, Monday through Friday.
- How do overlaps in Forex market hours affect trading?
- Overlaps in Forex market hours, particularly between the European and North American sessions, typically see increased trading activity and volatility. This can provide more opportunities for trading but also comes with higher risk.
- Are Forex market hours the same across all brokers?
- While Forex market hours are generally consistent, there can be slight variations among different brokers. It's important to check with your specific broker for their exact trading hours.
- Can I trade Forex during the weekend?
- Standard Forex market trading does not occur on weekends. However, some brokers might offer weekend trading on select currency pairs or markets.
This article is offered for general information and does not constitute investment advice. Please be informed that currently, Skilling is only offering CFDs.
Do not stop learning about the financial markets
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- CFD trading account types
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What is Forex trading?
Forex trading is the buying and selling of currencies on the foreign exchange market with the aim of making profit.Forex is the world's most-traded financial market, with transactions worth trillions of dollars taking place every day.
What are the benefits?
- Go long or short
- 24-hour trading
- High liquidity
- Constant opportunities
- Trade on leverage
- Wide range of FX pairs
How do I trade Forex?
- Decide how you'd like to trade Forex
- Learn how the Forex market works
- Open a Skilling CFD trading account
- Build a trading plan
- Choose a trading platform
- Open, monitor and close your first position
