Forex Market Hours and Trading Sessions

What is trading session?

Trading session is the time between the market open and close during which trades take place. In the forex market, trading sessions are less specific when compared to the stock market as it effectively trades 24 hours and the market is only closed during the weekend.

The overall trading session starts at 10 pm GMT on Sunday when the Sydney trading session begins and lasts until 9 pm GMT on Friday when the New York session closes. A slight change can be seen during winter as it shifts open time to 9 pm GMT and close time to 9 pm respectively. Additionally, these times are not strict as trading activity could begin or drop down a few hours earlier or later if the market conditions are right.

Read more on trading sessions, their opening times and average volatility here:

https://www.forexpeacearmy.com/forex-books/53/chapter-4-part-i-trading-sessions

Why is it important?

Following trading sessions is crucial in order to understand when you can expect the largest trading volume and activity in the market. For, example, overlap of London and New York sessions provides large trading activity. Therefore, large market swings can be seen during this time period. Additionally, market news for respective regions are released during their trading sessions and can cause the respective currency to move.

What are the main trading sessions?

There are 4 main trading sessions that usually are used and their times are based on the time that the respective exchange is open. They are, in order of open, Sydney, Tokyo, London and New York.

Tokyo/Sydney (Asian) session

Sydney is the first one that opens, followed by Tokyo and together these two are usually put together as a single Asian session. This is explained by the simple fact that the open and close times are very close together and much of the trading volume comes from other Asian countries such as Singapore, Malaysia, Hong Kong, China, and Russia among others.

Currencies such as JPY, AUD, and NZD are most traded during this time period.

Read more on London session here:

https://www.forexpeacearmy.com/forex-books/54/chapter-4-part-ii-japan-trading-session

London session

Next, after several hours of gap in the most popular trading sessions, we have London opening. This trading session starts picking up momentum around 7-8 AM GMT and lasts until 16-17 GMT. Similar as with Asian session, much of the activity comes from countries all around Europe with notable financial centers being Amsterdam, Paris, and Frankfurt. This makes the London session the busiest in term of trading volume and account for slightly more than a third of all volume.

Currencies such as EUR/USD, GBP/USD, USD/CHF are most traded during this time period.

Read more on London session here:

https://www.forexpeacearmy.com/forex-books/55/chapter-4-part-iii-big-ben-time-london-trading-session

New York session

New York session is second busiest by trading volume as around 17-18% of overall turnover is traded. Session starts to become active around 12:00-13:00 GMT and starts to slow down around 21:00-22:00 GMT. This means that much of London`s trading session overlaps New York`s and this provides huge liquidity in the market that large market players such as US and Europeans banks use to their advantage. Additionally, most of the significant market news happens during the morning while the trading session overlap.

Most traded are USD pairs such as EUR/USD, GBP/USD, USD/CHF and USD/JPY.

Read more on London session here:

https://www.forexpeacearmy.com/forex-books/56/chapter-4-part-iv-new-york-trading-session

Which trading session is the best?

For most traders, the best option is to trade during the times where most of the activity takes place. This means choosing London and New York sessions, especially during the time they overlap as mentioned before. Additionally, major market news are released during this trading session and the effects trickle down further into later Asian session.

On the other hand, the market tends to be calmer during the Asian trading session and can provide range trade opportunities. Further, calmer market conditions can provide the opportunity to open a trade with the expectation that further price activity during the London/New York session with less immediate risk. Therefore, if an important market pattern is expected to break, this can be used to enter the market before.

When looking at the whole week, the best time to trade is during the middle of the week. This is explained by the fact that large market players start to trade more actively. On the contrary, the worst time to trade is at the end of Friday. Market liquidity dries up and the market can become volatile without much volume traded as last of traders close positions in order to take profits or losses before the weekend. The first hours after the weekend can also be quite tricky to trade as not much liquidity is yet seen in the market.

See a full table of average market moves throughout the week here:

https://www.forexpeacearmy.com/forex-books/58/chapter-4-part-vi-when-should-we-trade

To conclude, some key takeaways are:

  • Most of the trading activity happens during the London and New York session, especially during the time they overlap.
  • When looking at a week as a whole, the best times to trade are during the middle of the week – Tuesday, Wednesday and Thursday.
  • Avoid trading at the beginning of weekly open and close as the market has low liquidity and sudden volatile price spikes could happen.
  • The market opens at 10 pm GMT on Sunday when the Sydney trading session begins and lasts until 9 pm GMT on Friday when the New York session closes.
  • News are usually released early in the trading session, therefore, expect increased volatility in the respective market.
  • Ultimately, it is up to you to choose the session that best suits your location and lifestyle as the Forex market is large enough to provide decent liquidity even during the quietest times.

What trading session is open now?

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Fat Finger

Fat Finger

Hello everyone!

My name is Phat Fin Ge, but most people just call me Fat Finger or Mr. Finger.

Many years ago, I was a trader on the Hong Kong Stock Exchange. I became so successful that my company moved me to their offices on Wall Street. The bull market was strong, but my trading gains always outperformed market averages, until that fateful day.

On October 28th, 1929, I tried to take some profits after Charles Whitney had propped up the prices of US Steel. I was trying to sell 10,000 shares, but my fat finger pressed an extra key twice. My sell order ended up being for 1,290,000 shares. Before I could tell anyone it was an error, everyone panicked and the whole market starting heading down. The next day was the biggest stock market crash ever. In early 1930, I was banned from trading for 85 years.

I went back to Hong Kong to work at my family's goldfish store. Please come and visit us at Phat Goldfish in Kowloon, only a 3 minute walk from the C2 MTR entrance.

I thought everyone would forget about me and planned to quietly return to trading in 2015. To my horror, any error in quantity or price which cause a problem kept getting blamed on Fat Finger, even when it was a mix up and not an extra key being pressed. For example, an error by a seller on the Tokyo Stock Exchange was to sell 610,000 shares at ¥6 instead of 6 shares at ¥610,000. That had nothing to do with me or with how fat the trader's finger was, but everyone kept yelling, "Fat Finger! Fat Finger!" In 2016, people blamed a fat finger for a 6% drop in the GBP. It really was a combination of many things, none to do with me or anyone else who had a wider than average finger.

Now that I can trade again, I'm finding forex more interesting than stocks. I've been doing some research on trading forex and other instruments and I'll be sharing it here.

If you see any typing errors, you can blame those on my fat finmgert. If you see any strange changes in price, it's not my fault.

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