Forex Market Hours and Sessions

The best thing with Forex market is that it’s not a centralized marketplace, meaning that there are no working hours. Forex market is open 24 hour a day from 5pm Sunday (EST) to 5pm Friday (EST) – so you can trade whenever you want during this trading session and to have a break in the weekends. You need to have in mind that liquidity and market movements are not the same the whole 24 hours per day. There will be periods of time when liquidity will be low and other when it would be extremely high. In this article I will show you when liquidity is high and when is the best time to trade – when London and US sessions overlap.

forex market hours

Forex Market Sessions

Because this is a 24 hour market, there’s always at least one active trading session. You can even find times when these sessions overlap. The simplest way to visualize how these Fx sessions operate is to think of the earth compared to the sun. Where ever the sun is shining, the Forex market is open. This really is obviously a simplified way of thinking about it, however it does help to visualize the Forex trading hours in this manner.

The Asian Session

asian stock marketThe Asian session begins when Sydney wakes up, but at this period of time markets are pretty much lazy and really nothing happens, well there will be little market fluctuations occasionally. When Tokyo opens 3 hours later then markets really kick in.

As I told you in previous lesson Japanese Yen is the third traded currency in the world so it’s not surpassingly that Tokyo boost markets. Tokyo is the third trading center in the world, so you can see what impact has on Asian session.

No matter Tokyo’s strength Forex market is not fully liquid, but don’t get upset by this statement – all price action and chart patterns can produce you good returns in Asian session.

Since the Asian economies are most active during the Asian session, financial news releases can be the main drivers for any action in this normally quiet period. Remember important economic announcements like interest rates and employment figures are released for all the Asian economies during the Asian session.

The London Session

london financial marketWhen London market opens you will know it and real trading will begin. London is considered to be the Forex capital of the world because of its strategic location, and the fact that most Forex brokers and dealers are located there.

No matter that Germany and France are open 1 hour prior to London, markets aren’t full liquid. When London’s opening bell is hit the volatility and liquidity is at their highest, these are also the periods when the broker spreads the cheapest.

London really setups the trend for the day and at that time the big players step into the market and you see trends start to develop on the charts as the large transaction start to flow in.

The New York Session

nyse

Right next to London is New York session, New York is the hearth of America, and guess Wall Street is located? You can recall from previous lesson, I said that US dollar is the most traded currency in the world, so when New York opens any news or economic event will have huge impact in the Forex market.

Along with New York, Canada is running too, so Canadian Dollar wakes up along with US dollar.

I have to note something important, about the New York session is about 1 hour after its open; the Chicago Mercantile Exchange opens, which deals with all currency and commodity futures. When Chicago opens you will see commodities like Gold, Silver and Crude Oil experiencing their highest amount of activity.

The London & New York Session Overlap

When New York session opens, the Asian session has already been closed for several hours, but London is still running its second half. The period of the second half or the London Forex trading session the first half of New York’s trading session creates liquidity overlap which is known as London-New York overlap period.

session overlap

I think you grasp what opportunity market is providing to us, at this overlap period market peaks out and price movement and liquidity is at their absolute maximum. It would be strange if this doesn’t happen – two of the biggest financial centere in the world are up and running at the same time and nobody wants to miss this action.

Once the London Fx trading session closes, action on the market dies down and the last half of the New York session is pretty tame. Sometimes there may be some late news reports released within the later portions of the New York session which might ignite some final volatility.

So which session is the best to trade?

If you’re intraday trader the best time for you to trade will be the London or New York session or the overlap between sessions. Don’t worry if you can trade only Asians session, there will be tons of opportunity on Asian session. Trading session is not the reason for not trading Forex marke, if you are more into swing trading every trading session will be best for you.

I’m hoping this lesson has gave you some light when it comes to Forex market hours along with the wolrd’s three market sessions that make up a 24 hour period.

 

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