When To Trade Forex
Even though some claim you can trade forex 24/7, the markets are actually only open 24/5 and not all times are good for trading. You should only trade a forex pair when it is active, and when you have enough volume.
In this guide, we highlight the key trading sessions and reveal the best time to trade forex.
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Why Timing Matters
The forex market is open 24 hours a day, with the same trading hours whether you are in the USA or Zambia, because time zones mean there is always a global market open somewhere. Despite that, not every market actively trades all currencies. As a result, different forex pairs are actively traded at differing times of the day.
For example, when the UK and Europe are opening, pairs consisting of the euro and pound are alight with trading activity. However, when the New York Stock Exchange, is active, pairs that involve the US dollar and Canadian dollar are actively traded.
So, if you were trading EUR/USD pairs, you will find the most trading activity when New York and London are open, or Tokyo for JPY and Sydney for the AUD.
Forex Trading Sessions
The image below shows the opening hours of markets (and end of session times) for London, New York, Sydney and Tokyo. Crossover periods represent the sessions with most activity, volume and price action, when forex trading is often most profitable.
Each session has a unique ‘feel’:
- Asian Session: Made up of the Asian markets, opening in New Zealand and Australia and moving west. This session generates lower volume and smaller ranges. The JPY, NZD and AUD are popular markets and news events can move prices significantly.
- The London (‘European’ Session): Actually kicks off in Frankfurt, and London an hour later. The UK opening sees larger volume in the forex markets, plus volatility will peak during this session. European institutions, banks and account managers will be active and macro-economic data is released.
- The New York (US) Session: This opens at 9.30am New York time, but US fundamental data can be released at 8.30am. This can create early volume before the ‘official’ 9:30 opening.
When Is The Best Time To Trade Forex?
The London and New York ‘crossover’ sees the most volatility and liquidity. Key fundamental data is released, financial institutions trigger forex contracts and ‘smart money’ is involved. As a result, this is one of the most attractive times to trade forex.
When Is The Forex Market Closed?
There are only two days in the calendar year with no forex trading hours: Christmas and New Year. The markets are completely closed on these days, whether they are weekdays or not.