FOREX MARKET HOURS
WHICH FOREX MARKET IS OPEN/CLOSED NOW? Before we look at the trending markets to trade, we need to look at what a 24-hour day in the Forex market feels like.
The foreign exchange market can be broken down into four main trading sessions: the Sydney session, the Asian session, the UK session, and the New York session. Here are the Open and Close Time tables for each session:
You can find that there is a period between sessions when two sessions are open at the same time. From 3:00 a.m. to 4:00 a.m. EDT, the Tokyo session and the London session overlap, and from 8:00 a.m. to 12:00 a.m. EDT, the London session and the NY session coincide. These are, of course, the busiest hours of the business day, as there is more liquidity when two exchanges are open at the same time. That makes sense, as all business players are dealing at those moments, which means that more hands are passing more capital.
Now, you’re just staring at the Sydney open and wondering why it’s going to take two hours. You’d imagine Sydney’s open will only push an hour as the U.S. changes for standard time, but note that when the U.S. moves an hour back, Sydney simply goes ahead by one hour (the seasons are reversed in Australia). You will still consider this should you ever intend to trade during that time.
The start of the Asian session at 7:00 p.m. EST signals the beginning of the Forex clock. You will remember that the Tokyo Session is often referred to as the Asian Session since Tokyo is the financial center of Asia.
One point worth mentioning is that Japan is the world’s third-largest Forex trading hub. It should not be so unexpected, because the yen is the third most exchanged currency to invest in 16.6% of all Forex trades. Overall, approximately 21 percent of all Forex market trades are performed during this session.
Here are some main features that you should learn about the Tokyo session:
- Activity is not limited to Japanese coasts. Loads of Forex trades are made at other financial hot spots such as Hong Kong, Singapore, and Sydney. Financial firms (exporters) and central banks are the key market players at the Tokyo conference. Note, Japan’s economy relies heavily on exports, and, as China is still a big trading party, there are tons of transactions taking place regularly.
- Liquidity can be minimal at times. There will be periods when trading during this era is going to be like fishing-you may just have to wait a long, long time before you get a nibble. It’s far more likely that you will see more significant changes in Asia-Pacific currency pairs like AUD / USD and NZD / USD than non-Asia-Pacific currency pairs like GBP / USD.
- At specific periods of low liquidity, most pairs that stay within the. These offer incentives for short day trading or future breakouts later in the day. Most of the range activity is taken early in the day before further economic data is released.
- Moves in Tokyo could set the pace for the rest of the day. Traders in the later sessions can look at what happened during the Tokyo session to help plan and test the techniques to be used in other sessions.
- Currently, after several significant changes in the previous New York session, you may see restructuring during the Tokyo session.
New York Session
As soon as European traders come back from their breaks, the U.S. Session starts. 8:00 a.m. EST as traders prepare to go into the office. Much like Asia and Europe, there is one big financial hub in the U.S. that investors hold their eyes on.
Here are a few tips you need to know about trading in the U.S. session:
- There is a high degree of turnover in the morning as it overlaps with the European session. Much of the economic forecasts are issued at the start of the New York week.
- Note, about 85% of all trades include the dollar, and once U.S. economic data is released, it has the power to impact stocks. As long as European exchanges close their stores, liquidity and prices begin to decline during the U.S. afternoon session. There is very little activity Friday afternoon, as Asian traders are at rest while European traders go out to the pub to watch the soccer match.
Asian Trading Session
The Australian and Japanese trade sessions differ to a considerable degree. Thus, when we speak about the Asian trading session, we also refer to the Japanese session (or Tokyo session) as Tokyo is the third-largest trading center in the world (representing 6.2 percent of the total trading volume).
In comparison, approximately 20% of all transactions within a day emerge during the Asian trading session, while Japan’s yen account for about 23% of all transactions in the foreign exchange market as a whole.
However, Japan is also not the only nation to trade during this session. Many big centers include Hong Kong, Singapore, and Sydney. Centers, including China, New Zealand, Russia, and Malaysia, are also participating during the Asian conference. So the Asian session does not automatically start and finish with the opening and closing of Tokyo as a hub.
The session starts at 23:00 GMT and continues until 8:00 GMT on the next day, or from 19:00 EDT to 4:00 EDT during the summer season and from 18:00 EST to 3:00 EST during the winter season. At the very beginning of the day, only centers such as Sydney are trading, which describes why trade rates are comparatively low and thus demands fluctuations are likely to be minor compared to market shifts seen during the European and American sessions.
Forex Market Hours For UK
Just as Asian market players are beginning to close their stores, their European counterparts are only starting their day.
Though there are many financial centers all over Europe, it is London that holds the attention of Forex market hours participants.
Historically, due to its strategic position, London has always been at the forefront of trade. It’s no surprise that it’s called the world’s Forex hub, with thousands of entrepreneurs making trades every single minute. About 30% of all Forex trades occur during the London session.
Here are some obvious facts about the European Session:
- Since the London session clashes with the other two main trading sessions — and London is such a critical financial center — a substantial portion of foreign exchange trade takes place at that period. This leads to high visibility and potentially reduced transaction costs, i.e., lower pips spread.
- Volatility appears to die in the middle of the day when traders frequently go out to eat lunch while waiting for the New York trading season to begin. Trends may often reverse at the close of the London session, when European traders may want to lock in gains.
FOREX MARKET OPEN ON SUNDAY
At 5:00 p.m. EST Sunday, trade starts as markets open in Sydney. At 7:00 p.m. EST. The Tokyo market is open, followed by the UK at 3:00 EST. And now, New York is opening up at 8:00 a.m. EST, starting at 4:00 p.m. EST. Before New York closes, the Sydney session is back open-it’s a 24-hour smooth market!
As an investor, this helps you to respond quickly to favorable or unfavorable news by trading. If essential data arrives from the United Kingdom or Japan when the U.S. futures market is closed, the next day’s opening might be a crazy ride. (There are futures currency markets overnight, but they are poorly priced, not very liquid, and are impossible for the ordinary investor to access.)
Yeah, the Forex market is indeed available 24 hours a day, but it doesn’t mean it’s active the entire day / week-long. You can make money investing when the market goes up, and you can lose money when the market goes down. But you’re going to have a really tough time trying to profit when the market doesn’t move at all.