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Preschool When Can You Trade Forex?

Forex Trading Sessions

Now that you know what forex is, why you should Partner Center
trade it, and who makes up the forex market, it’s about Find a Broker

time you learned when you can trade.

It’s time to learn about the different forex trading

sessions.
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Yes, it is true that the forex market is open 24 hours a day, but that doesn’t
mean it’s always active the entire day.

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You can make money trading when the market moves up, and you can
even make money when the market moves down.

BUT you will have a very difficult time trying to make money when the
market doesn’t move at all.

And believe us, there will be times when the market is as still as the victims
of Medusa.
This lesson will help determine when the best times of the day are to trade.

Forex Market Hours

Before looking at the best times to trade, we must look at what a 24­hour
day in the forex world looks like.

The forex market can be broken up into four major trading sessions: the
Sydney session, the Tokyo session, the London session, and Trump’s
favorite time to tweet (before he was banned), the New York session.
Historically, the forex market has three peak trading sessions.

Traders often focus on one of the three trading periods, rather than attempt
to trade the markets 24 hours per day.

This is known as the “forex 3­session system“.

These sessions consist of the Asian, European, and North American

sessions, which are also called Tokyo, London, and New York sessions.

Some traders prefer to differentiate sessions by names of the continent,

other traders prefer to use the names of the cities.

(We prefer using city names but continents are cool also.)

DID YOU KNOW? The combined share of the top four trading centers, which includes
London, New York, Singapore, and Hong Kong amounts to 75% of global FX turnover.

The International Dateline is where, by tradition, the new calendar day

starts.
Since New Zealand is a major financial center, the forex markets open
there on Monday morning, while it is still Sunday in most of the world.

Even though trading starts in New Zealand, it’s still called the Sydney
session. Makes no sense but we don’t make the rules.

Until Friday, there is no time during the week when the market formally
closes, although there is a brief lull in activity between about 19:00 and
22:00 GMT when most American traders have gone home and most Kiwi
and Aussie traders are getting ready for work.

Other than the weekends, there are just two public holidays when the entire
forex market is closed, Christmas and New Year’s Day.

Below are tables of the open and close times for each session:

LOCAL TIME EST UTC

Sydney Open – 7:00 AM 4:00 PM 9:00 PM

Sydney Close – 4:00 PM 1:00 AM 6:00 AM

Tokyo Open – 9:00 AM 7:00 PM 12:00 AM

Tokyo Close – 6:00 PM 4:00 AM 9:00 AM
 London Open – 8:00 AM 2:00 AM 7:00 AM
London Close – 5:00 PM 11:00 AM 4:00 PM

New York Open – 8:00 AM 8:00 AM 1:00 PM

New York Close – 5:00 PM 5:00 PM 10:00 PM

Actual open and close times are based on local business hours, with most
business hours starting somewhere between 7­9 AM local time.

Daylight Savings Time

Open and close times will also vary during the months of
October/November and March/April as some countries (like the United
States, United Kingdom, and Australia) shift to/from daylight savings time
(DST).

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The day of the month that a country shifts to/from DST also varies,
confusing us even more.

And Japan doesn’t observe daylight savings, so thank you Japan for
keeping it simple.
Now, you’re probably looking at the Sydney Open and wondering why it
shifts two hours in the Eastern Timezone.

You’d think that Sydney’s Open would only move one hour when the U.S.
adjusts for standard time, but remember that when the U.S. shifts one hour
back, Sydney actually moves forward by one hour (seasons are opposite in
Australia).

Keep this in mind if you ever plan to trade during that time period.

Dealing with DST is a pain but that’s what happens when a market trades
around the clock!

It’s important to remember that the forex market’s opening hours will
change in March, April, October, and November, as countries move to
daylight savings on different days.

If you’re still confused, no worries! We built a Forex Market Hours tool that will
automatically convert all four trading sessions in your local time zone. Use it as a
reference until you remember the market hours from memory.

Trading Session Overlaps

Also take notice that in between each forex trading session, there is a
period of time where two sessions are open at the same time.

For example, during the summer, from 3:00­4:00 AM ET, the Tokyo
session and London session overlap
And during both summer and winter from 8:00 AM­12:00 PM ET, the
London session and the New York session overlap.

Naturally, these are the busiest times during the trading day because
there is more volume when two markets are open at the same time.

This makes sense because, during those times, all the market participants
are wheelin’ and dealin’, which means that more money is transferring
hands.

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Now let’s take a look at the average pip movement of the major currency
pairs during each forex trading session.

PAIR TOKYO LONDON NEW YORK

EUR/USD 76 114 92

GBP/USD 92 127 99

USD/JPY 51 66 59

AUD/USD 77 83 81

NZD/USD 62 72 70
 USD/CAD 57 96 96

USD/CHF 67 102 83

EUR/JPY 102 129 107

GBP/JPY 118 151 132

AUD/JPY 98 107 103

EUR/GBP 78 61 47

EUR/CHF 79 109 84

From the table, you will see that the London session normally provides
the most movement.

Notice how some currency pairs have much larger pip movements than
others.
To see the average pip movement for specific currency pairs in real­time,
you can use our MarketMilk™ tool.

For example, here’s the volatility per hour for EUR/USD filtered by London
and NY sessions:
Let’s take a more in­depth look at each of the sessions, as well as those
periods when the sessions overlap.

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Next Lesson
When Can You Trade Forex: Tokyo Session
 Procrastination is the thief of time.Edward Young

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