Trading Hours – Time in Forex Trading

The Forex market is global, open to action 24/5. Still, there are better and worse times to trade. There are times in which the market rests, and times when the market rages like a fire. The best times to trade are when the market is packed with activity. At these times changes are bigger, trends are stronger, volatility is higher and more money is changing hands. We recommend trading in times of sizzling volume!

There are four centers of market activity. They are introduced from east to west (chronologically trade starts east and ends west): Sydney (Australia), Tokyo (Japan), London (Great Britain) and New York (USA).

The busiest trading hours are 8-12 am New York time (when two sessions are working simultaneously – London and NY), and 3-4 am New York time (when Tokyo and London are simultaneously active).

The busiest trading session is the London session (the European session).

The Sydney session is more local and centralizes low activity. It is great if you live in this part of the world or are familiar with the socio-economic and political conditions in Oceania, but if you’re not, it is best avoided.

Tokyo – The center of the Asian markets. The Tokyo session is an active one, approximately 20% of all global activity takes place at this time. The Yen (JPY) is the third most powerful currency (after the USD and EUR). 15-17% of all Forex transactions include JPY. Major forces in Asia are mainly the central banks and gigantic Asian commercial corporations, particularly the ever-growing Chinese financial sector and the Chinese traders. Popular currencies in the Tokyo session are JPY of course, and AUD (Australian Dollar).

The first economic news to be released during the day comes from Asia. That’s why opening hours usually encourage strong activity and set the tone for the following sessions. Impacts on the Tokyo session can come from NY closing (the session before), major news coming from the Chinese market and events happening in neighboring Oceania. The Tokyo session starts at 7 pm NYT.

London – The center of the European financial market in particular, as well as the global market in general. Above 30% of all daily forex transactions take place in London’s session. Due to its high volume, London offers many options and opportunities, but also higher risks. Liquidity is high and markets can be volatile which offer great winning potential if you know how to trade properly.

Trends in this session can look like a roller coaster. News and events from all over the world feed into this session. Many trends which begin in London session, keep their momentum in the following NY session by moving further in the same direction. We recommend entering this session with positions on the majors, and not on exotic pairs or currency crosses. Commissions being charged on the majors during this session are the lowest. The London session opens its doors at 3 am NYT.

New York – A very significant session due to its wide range of activity and because it is the center of trade for the USD. At least 84% of global Forex trading include USD as one of the traded instruments that make up the currency pairs. The published daily news is extremely important, influencing all four sessions. This factor, together with the parallel European session in morning hours, make these hours (till lunch break New York time) the busiest hours in this session. Starting noontime this session weakens and on Friday afternoon it goes to sleep for the weekend. There are times when we can still catch a lively trade because sometimes trends change direction just before close.

Remember: The busiest trading hours are when two sessions are simultaneously active, especially the intersection hours of London + NY (London’s closing hours are usually very volatile and characterized by powerful trends).

Tip: The best days to trade are Tuesday – Friday, at NY early afternoon hours.

It’s Time to Begin!

Now you understand why Forex has become the most popular market in the world. You also understand how inviting and convenient it is, for all kinds of traders, at any hour, in any place, and with any amount of money. Forex offers massive earnings potential for traders of all types.

While one trader relates to Forex as an opportunity in an attempt to earn additional income, a second trader may look at Forex as a great long-term investment opportunity in order to make nice returns on his savings instead of letting them rest in the bank. A third trader might consider Forex a full-time profession, studying market analyses thoroughly so he can make big returns systematically; meanwhile, a fourth trader, who is willing to take risks may look for ways to leverage his positions to maximize his gains.

Understand the Numbers

Each and every day more than 5 trillion dollars are traded around the globe! Think about it – that means that more than 5 million traders worldwide can make 1 million dollars each! More than 80% of Forex transactions are executed by small and medium traders!

Tip: If you are interested in further investment channels beyond the Forex market, the commodities market offers great opportunities. Examples of common objects are gold, silver, oil, and wheat (Prices of these goods rose dramatically over the past few years, in tens and even hundreds of percentages!). In essence, commodities trading is similar to Forex, and today, almost all popular brokers offer commodities trading as well as Forex. We’ll look at this topic in more detail later on in the course.