“Due to higher liquidity and greater trading activity, the best opportunities often arise when these sessions overlap.”

You may have heard it before: the forex market is open 24 hours a day, 5 days a week. However, the fact that you can trade at any given time during the day does not mean that you should. Optimising your trading schedule according to your strategies and the assets you trade is an important part of enhancing your trading plan.

Let’s see how the forex market can change during different hours of the day and how having a solid knowledge of the market hours can help you schedule your trading for better opportunities.

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Forex Market Hours

As indicated above, the forex market operates 24 hours a day, 5 days a week. This is possible because it is a global marketplace with trading activities spanning across various time zones. As financial centres open and close in different parts of the world, trading transitions from one major market to another.

Understanding how forex market hours affect the forex market helps traders identify the most active and volatile periods and better plan their trading times. They can also align their strategies with the specific trading sessions when their preferred currency pairs are most liquid, making sure their trading coincides with market opportunities.

Forex Market Opening and Closing Times

So, when does the forex market open and close? Earlier, we touched on the fact that it operates 5 days a week. Now it’s time for us to go into more detail about when those 5 days begin and when they end.

  • Opening Time: The market opens when banks in New Zealand open at 9 AM on Monday local time. This translates to 10 PM GMT, so it is technically still Sunday in most of the world.
  • Closing Time: It closes when banks in the US close at 5 PM on Friday local time, which corresponds to 10 PM GMT on Friday night.

From Monday until Friday, the forex market stays open for 24 hours, because while it closes somewhere in some part of the world, it opens somewhere else in another part of the world. These phases are called forex trading sessions.

Forex Trading Sessions

Around the globe, the forex market is divided into four main sessions, each corresponding to major financial hubs.

  • Sydney Session: Opens at 10 PM GMT and closes at 7 AM GMT. Pairs involving AUD and NZD are particularly active during this time.
  • Tokyo Session (Asian Session): Opens at 12 AM GMT and closes at 9 AM GMT. The focus is primarily on JPY pairs during this session.
  • London Session (European Session): Opens at 8 AM GMT and closes at 5 PM GMT. Major currency pairs, like EURUSD and GBPUSD, are heavily traded during this period.
  • New York Session (North American Session): Opens at 1 PM GMT and closes at 10 PM GMT. It is a session that is particularly active for USD pairs.
Forex Sessions

Forex Market Hours During Daylight Savings

Daylight savings time (DST) can shift the opening and closing times of forex sessions by one hour. You should, therefore, consider the impact this will have on your trading times.

But that is not all. DST is unfortunately more complex than that. This is because not every country follows it in the same way. Some countries do not observe it at all, and those that do, do not always observe it on the same date.

Here is what you need to know:

  • The Tokyo session is not affected since Japan does not follow DST.
  • The New York and London sessions move one hour back in autumn.
  • The US usually begins DST two or three weeks earlier than the UK and the rest of Europe.
  • The Sydney session moves one hour forward because seasons are opposite in that part of the world.

The Best Times to Trade in the Forex Market

The Tokyo session, the London session, and the New York session are the peak-activity sessions that comprise the ‘forex 3-session system’. Due to higher liquidity and greater trading activity, the best opportunities often arise when these sessions overlap.

Additionally, the best time to trade for you will depend on the currency pair you will be trading. Some currencies are more actively traded during certain sessions, leading to higher liquidity and volatility in pairs including that currency (e.g., USD during the New York session and JPY during the Tokyo session).

Forex sessions overlap three times a day:

The London and New York Overlap

  • Time: 12 PM GMT to 4 PM GMT
  • Significance: This is the most significant overlap, involving the world’s two largest financial centres. It often results in high liquidity and significant price movements, making it a prime time for trading major currency pairs like EURUSD and GBPUSD.

The Tokyo and London Overlap

  • Time: 7 AM GMT to 8 AM GMT
  • Significance: This overlap is shorter and typically less volatile than the London-New York overlap, but it still provides good trading opportunities, particularly for EUR and JPY pairs.

The Sydney and Tokyo Overlap

  • Time: 12 AM GMT to 7 AM GMT
  • Significance: This overlap can see moderate trading activity, with a focus on JPY, AUD, and NZD pairs.

Forex Market Hours During Public Holidays

The forex market only closes for two public holidays in the year: Christmas day and New Year’s day. Other holidays can also affect trading hours and activity levels depending on the country. Monitoring an economic calendar can help you anticipate these variations and plan your trades accordingly.

We always keep you informed about any changes to our trading hours in advance.

Final Thoughts

The forex market can be open for 24 hours a day, 5 days a week. However, trading activity, and therefore the liquidity and volatility levels of currency pairs, are constantly changing according to specific times during the day. Opportunities present themselves when there is enough volatility. So, it is important to keep an eye on these times and schedule your trades accordingly.

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Frequently Asked Questions

1. What are the 4 trading sessions?

  • The Sydney session
  • The Tokyo session (Asian session)
  • The London session (European session)
  • The New York session (North American session)

2. Which trading sessions are the best sessions?

The Tokyo session, the London session, and the New York session are the 3 peak-activity sessions known as the ‘forex 3-session system’. Overlaps between these sessions especially lead to higher liquidity and volatility, which creates more trading opportunities.

3. What time should I trade forex?

This depends on your chosen currency pairs and your trading strategy. Generally, the most favourable times are those with the most trading activity. For instance, the overlap between the London and the New York sessions has the heaviest volume of trading. This leads to higher liquidity and more opportunities.

4. What time should I avoid trading forex?

You should generally avoid trading during periods of low liquidity and high spreads. This usually happens in the last hour of the New York session and at the start of the Sydney session when market activity is slow.

Liquidity can be low during important public holidays as well, especially in countries that are major trading centres such as the UK, the US, and Japan.

Additionally, trading should be avoided during significant news releases as they can lead to extreme volatility and unpredictable price movements.

5. Can I trade forex at night?

Yes, it is possible to trade forex at night. However, depending on your time zone, the market can be less liquid and less volatile during the night, which can result in wider spreads and fewer opportunities. You should align your trading times with sessions that best match the currency pairs you are interested in and your trading strategies.

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