As a forex trader, it is vital that you become conversant with the different forex market hours.
It will help to improve your forex trading prospects significantly since the FX market tends to vary for the different trading sessions.
It is good to have knowledge on when the market is likely to experience high volatility or large trading volume so as to reap the maximum benefits.
In the past, I have received questions like “what time does forex market open” and some even more specific like “what are the forex market hours in my local time zone?”
Introduction to Forex Trading Sessions
Among the most outstanding characteristics of the foreign exchange market is that it opens 24 hours a day for 5 days a week.
This makes it possible for investors worldwide to trade during the set business hours, after work, and throughout the night for those that find it convenient this way.
Nevertheless, not all forex market hours or trading sessions are equal. Around the world, there are forex trading sessions when price action is constantly volatile, while at other times, the price action is totally muted.
Various currency pairs show different activity at varying times of the trading day as a result of the general demographic of those market participants who are online at that particular time.
This serves as motivation to accept that the main trading sessions are directly interconnected with forex market hours.
Understanding of the Forex Market Hours
Hedge funds, commercial companies, banks, investment management firms, central banks, retail forex brokers, and global investors make up the international currency markets.
Since this market works in various time zones, it is accessible at any time other than during the weekend break.
The international currency market isn’t controlled by any market exchange, but it is characterized by a global network of exchanges and brokers worldwide.
Forex market hours are dependent on the time that trading is open in every participating country.
As the timezones overlap, the basic accepted time zones in every region are as follows:
New York 8am to 5pm EST (1pm to 10pm UTC)
Tokyo 7pm to 4am EST (12am to 9am UTC)
Sydney 5pm to 2am EST (10pm to 7am UTC)
London 3am to 12 noon EST (8am to 5pm UTC)
Below is a forex market hours chart for different time zones.
|Trading Session||Local Time||EST||GMT||UTC|
Forex Market Hours Breakdown
Below is a brief review of the four markets hours in EST (Eastern Standard Time)
NOTE: You should convert the time to your own time zone so that you do not get confused when doing your analysis and executing your trades.
The U.K. dominates the world’s currency markets, with London as its main component.
According to a report by BIS, London, which is the world’s central trading capital is responsible for about 43% of global trading.
The city also largely affects currency fluctuations as the Bank of England, which is responsible for setting interest rates and for controlling the monetary policy of the GBP, is based in London.
Additionally, forex trends normally start in London, and this is something good that technical traders should have in mind.
New York is the second-largest forex trading platform as per world ranking and is heavily watched by foreign investors since the U.S. dollar is involved in almost 90% of all trades. This is according to Day Trading the Currency Markets.
In the New York Stock Exchange (NYSE), movements could immediately and greatly affect the dollar.
When companies merge and acquisitions are completed, the dollar could immediately gain or lose value.
The trading day officially begins in Sydney.
Even though it is the smallest of all mega-markets, it has plenty of initial action once the markets reopen on Sunday afternoon.
This is because financial institutions and individual traders are making an effort to regroup following the long pause from Friday afternoon.
This is the very first Asian trading center, and it handles the largest bulk of Asian trading, ahead of Hong Kong and Singapore.
The currency pairs that basically have a good level of action are GBP/CHF, USD/JPY, and GBP/JPY.
The USD/JPY is a really good pair to watch when only the Tokyo market is open due to the great influence of the Bank of Japan over the market.
I hope by now you have a good understanding of the different forex market hours depending on the geographical location involved.
You Get more Possibilities with more Activity
The forex market opens 24 hours a day, as mentioned above.
As a forex trader, you will not be able to sit in front of your screen for the entire 24 hours looking for trades.
As a result, you should know the most active trading periods in order to take advantage.
If we take a period that is not very active between 5 pm – 7 pm EST, after New York closes and before Tokyo opens for example, Sydney opens up for trading but with less activity compared to the other trading sessions.
Therefore, less activity signifies less financial opportunity.
If you wish to trade currency pairs such as USD/CHF, GBP/USD or EUR/USD, you would get more activity between 8 am – 12 pm EST.
This is because both the London and New York trading sessions are open.
Alertness and Opportunity
The other forex market hours to take note of are the release times of government reports and official economic news.
Governments give timetables for the exact news release times. They however, do not coordinate releases between the different countries.
It is therefore important to check out the economic indicators that are published in the main countries because the indicators coincide with the moments that are most active for forex trading.
Such increased activity signifies greater opportunities in currency prices, with orders sometimes being executed at prices that are different from those you anticipated.
You can go for one of two main options as a trader; to either have the news periods as part of your forex trading hours or decide to willingly do away with trading in such times.
No matter the option you choose, ensure you take a proactive approach when prices change abruptly during a news release.
The Best Time to Trade the Market
Also, the top of the hour, the first, and the last five minutes of every hour normally give volatility and spiky market movements.
The periods when there is an overlap of two trading sessions also provide favorable trading opportunities due to high volatility, as mentioned above.
London and New York Session Overlap
This is the period that sees a lot of trading activity.
There are numerous traders sitting on the sidelines waiting for this period. Actually, there are forex traders who trade exclusively during this period.
Given the number of active traders during the period, this tends to be the busiest time of the day. This is attributed to the fact that the New York and London sessions attract the most traders since they are the largest financial centers.
As a result, there is a tendency of experiencing big moves during these forex market hours due to news releases coming from Canada and the U.S. and’ late’ news emanating from Europe.
Most of the trends or setups established during the London session tend to continue with the open of the New York session.
However, you ought to be careful if you are using tight stops as this overlap is coming to an end. Some of the traders that solely focus on the London session will be closing their positions hence resulting in some choppy moves or spikes(as some traders call them).
Something to NOTE:
High Volume Forex Market Hours do not Always Result in Profits
It is important for forex traders to act with caution as currency trades normally involve high leverage rates of even 1000:1.
Despite this ratio giving great profit opportunities, it has a trader’s risk of losing an entire investment in one trade.
As a result, you should always proceed with caution.
As per a 2014 Citibank study, only 30% of retail forex traders are able to break even or do better.
The main point is that as a newbie forex trader, you need to open trading accounts with firms that give demo platforms, thus allowing you to make mock forex trades and total up imaginary profits and losses.
Only when you have tested your trading strategy, then you can move to live trading.
To conclude, I hope now the issue of forex market operating hours is clear. It would be dumb to be trading anyhow without even knowing which forex market hours are favorable for you.
One thing you should note, though, is that you are likely to encounter forex market hours EST, GMT, PST e.t.c while searching the web. It is important that you convert it to your time zone so that you do not end up trying to trade the wrong forex market hours due to interpreting the information wrongly.
I think this answers the question for those that might be asking about something relating to “forex market hours in my local time zone.”