The Best Trading Hours in the Forex Market

The Forex Market Time Zone Converter displays which trading session(s) is open in your current local time. It is dominated by participants from North America, such as the US, Mexico, Canada and other South American countries like Argentina. USD is the primary currency during this session which amounts to about 85 percent of the trade volume during this period. Instead of trading for a few hours each day, you may find yourself waking up early or staying up late just to place trades. Babypips has created a really cool Forex market time zone converter that will help you understand when each session is occurring.

They have access to vast amounts of liquidity and often act as market makers, providing bid and ask prices for currencies. Understanding the behavior of banks can help traders identify potential areas of support and resistance, as well as anticipate price movements based on their buying or selling activity. Trading major currency pairs such as EUR/USD, USD/JPY, GBP/USD, GBP/CHF, GBP/ JPY and USD/CHF during this period can be profitable. Due to the high trade volume, major currency pairs often experience tighter spreads. Aside from that, major economic news from Eurozone countries like the UK and Switzerland is released during this period, and it can very likely affect pairs that involve Euro and Pounds.

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Once investors learn become more experienced, they can begin making real forex trades. This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result.

Trading activity in currencies reaches its maximum level when the New York trading hours open and US banks begin to work, and European dealers return after their lunch break. The influence of European and American banks is similar, so no significant changes take place compared to the start of the European trading session. However, after the termination of the European market volatility may be higher.

Sydney forex trading session

Opportunities are more likely to be found during the first three hours of a session. Also, the Top of the Hour, which is the first and last five minutes of every hour, brings activity spikes to look out for. These are identified as the Asian, European, and North American markets. In the trader’s lingo, they are known as Tokyo, London, and New York sessions. Important economic data from the region that may affect European and American session are released during that time. You can expect significant price movements on USDJPY, EURJPY and AUDJPY.

A trade operation means that the trader buys or sells the base currency against the quote currency. Discover the factors causing volatility and how you can harness market fluctuations in your favour to better take advantage of large market moves covering the financial markets. To continue learning the basics of FX, check out Forex Trading Sessions our guide on forex trading for beginners, or attend one of our forex trading webinars hosted by expert market analyst, Desmond Leong. Like many other investments, you can earn significant profits, but you could also suffer losses. For example, the London-New York overlap is often more liquid than the London-Tokyo overlap.

What is a currency pair?

There are safer waters elsewhere, and you don’t want to find yourself swimming upstream in losses to start the week. Market liquidity can have a significant impact on forex trading strategies. In highly liquid markets, traders can execute trades quickly and at the desired price, reducing the risk of slippage. However, in less liquid markets, traders may experience difficulties in entering or exiting positions at desired levels, which can increase trading costs and introduce additional risks.

Volume and volatility, because they reach their peak during these hours! During this time, the market is busy with active participants, currencies move very quickly, and the most important economic news is also published in this time period. In terms of the actual trading strategy, trading during the London market opening hour is no different than trading any other time of the day.

Times of Increased Opportunities

While some investors fear market volatility because of the increased risk, forex traders generally prefer greater volatility because they have the potential to earn higher profits. Typically, a forex pair has greater liquidity when at least one of its markets is open – USD/JPY will be busiest during the Asian or US sessions, but less so during the London or European session. EUR/JPY is more active at the open of the London session, and EUR/USD will not be quite as busy during the Asian session, and so on.

The best time to trade is when the market is active with lots of forex traders opening and closing positions, which creates a large volume of trades. Another important aspect of market structure is the presence of market liquidity. Liquidity refers to the ease with which a currency can be bought or sold without causing significant price fluctuations. Highly liquid currencies, such as the U.S. dollar, euro, and Japanese yen, tend to have tighter bid-ask spreads and lower transaction costs.

If you already have an XM account, please state your account ID so that our support team can provide you with the best service possible. From the table, you will see that the London session normally provides the most movement. Now, you’re probably looking at the Sydney Open and wondering why it shifts two hours in the Eastern Timezone. 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. These sessions consist of the Asian, European, and North American sessions, which are also called Tokyo, London, and New York sessions.

I hope this lesson has shed some light on the subject of Forex market hours as well as the various market sessions that make up a 24 hour period. For now, just know that the market never closes due to the needs of international trade, as well as the needs of central banks and global industries to conduct business. So although the ability for retail traders to participate is halted over the weekends, the Forex market as a currency exchange is alive and well. The 24-hour trading on Forex enables traders to take advantage of news and market changes outside their working hours, with prices on the Forex market constantly fluctuating.