Best Forex Trading Hours
The foreign exchange (forex) market spread and the profit a forex trader makes depends on when he chooses to trade. Hence forex traders, especially those who are new to forex trading, would like to find the Best Forex Trading Hours. Experts claim that the optimal time for trading forex is when the market activity is highest, since the difference between the bid and ask prices, the trading spreads will reduce to the lowest level. During this period, the forex brokers make less money, and the forex traders can profit for themselves. But is this true only in theory?
The largest forex exchanges in the world are Tokyo, London, Sydney, and New York exchange. Forex traders need to remember when the working hours of these exchanges and when more than one exchange is open. If the multiple exchanges are open, the trading volume increases, adding to the volatility and increase of the currency prices. Forex traders can benefit from these factors. Though investors usually do not like volatile markets, high volatility results in more opportunities to profit in forex.
What time is the forex market most active?
The most active trading hours are from 8 a.m. EST to 12 a.m. EST when both the New York and London forex markets are open. At this time, forex liquidity and volatility will likely be high because the US dollar market share is around 88% by the value of turnover. However, important market news can change the market activity period, and the price of a currency pair can dramatically go up or down at that moment.
During Sydney and Tokyo, forex sessions forex trading volumes are lower since these are smaller markets.
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Forex trading sessions in EST and GMT
Forex sessions can be divided into four major trading sessions: the Sydney session, the Tokyo session, the London session, and the New York session. A trading session is a period of time when market participants actively trade. However, many traders divide forex sessions into Asian, London, and US sessions.
Forex trading sessions GMT (spring and winter time)
There are 15 independent exchanges worldwide, which are open every week from Monday till Friday. However, these 4 markets are the most liquid and most important. Let us see now forex session time for EST:
Forex trading sessions EST (spring and winter time)
Sydney trading session
What time does the Sydney session open?
Sydney forex session opens at 22 GMT (springtime) or 21 GMT (winter time). Sydney forex session opens at 18 EST (springtime) or 17 EST (winter time).
Now let us see when does Sydney markets close:
What time does the Sydney session close?
Sydney forex session closes at 7 GMT (springtime) or 6 GMT (winter time). Sydney forex session closes at 3 EST (springtime) or 2 EST (winter time).
So to sum up:
Sydney session time is from 22-7 GMT during spring or 21-6 GMT during winter. Sydney session time is from 18-3 EST during spring or 17-2 EST during winter.
Tokyo trading session
What time does the Tokyo session open?
Tokyo forex session opens at 23 GMT or 19 EST.
What time does the Tokyo session close?
Tokyo forex session closes at 8 GMT or 4 EST.
Tokyo session time is from 23-8 GMT or 19-4 EST.
London trading session
What time does the London session open?
London forex session opens at 7 GMT (springtime) or 8 GMT (winter time). London forex session opens at 3EST (springtime) or 4EST (winter time).
What time does the London session close?
London forex session closes at 16 GMT (springtime) or 17 GMT (winter time). London forex session closes at 12 EST (springtime) or 13 EST (winter time).
To sum up:
London session time is from 7-16 GMT during spring or 8-17 GMT during winter. London session time is from 3-12 EST during spring or 4-13 EST during winter.
New York trading session
What time does the New York session open?
New York forex session opens at 12 GMT (springtime) or 13 GMT (winter time). London forex session opens at 8 EST (springtime) or 9 EST (winter time).
What time does the New York session close?
New York forex session closes at 21 GMT (springtime) or 22 GMT (winter time). London forex session closes at 17 EST (springtime) or 18 EST (winter time).
To sum up:
New York session time is from 12-21 GMT during spring or 13-22 GMT during winter. The New York session time is from 8-17 EST during spring or 9-18 EST during winter.
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What time is the Asian trading session
Asian session forex time is a trading session between 23 and 8 GMT or 19 and 4 EST. Asian session overlaps with Tokyo forex session, and in Japanese time this session occurs from 9 to 18 JST.
See major forex market hours – forex trading session times Table:
| Time Zone forex.in.rs | EST Spring | EST Winter | GMT Spring | GMT Winter |
|---|---|---|---|---|
| Sydney Open | 18 | 17 | 22 | 21 |
| Sydney close | 3 | 2 | 7 | 6 |
| Tokyo Open | 19 | 19 | 23 | 23 |
| Tokyo close | 4 | 4 | 8 | 8 |
| London Open | 3 | 4 | 7 | 8 |
| London close | 12 | 13 | 16 | 17 |
| New York Open | 8 | 9 | 12 | 13 |
| New York Close | 17 | 18 | 21 | 22 |
Best Times for trading in Forex
The Most Profitable Trading Hours in the Forex Market are usually in periods of high volatility for trend trading strategies, such as periods when European and USA market trading sessions overlap.
For most forex traders, the best time to trade is the four-hour period when both the London and New York exchanges are open from 8 am till 12 noon (EST). More than half the forex trades take place at these exchanges. On the other hand, around 18 (EST), most of the trading occurs at the Sydney, Singapore exchanges, which have a far lower trading volume. The expected trading volume assumes that there will be no news affecting the forex market. If there is a military or political crisis, there may be an increase in trading volume, volatility even during the timings when the market is usually slow, so forex traders can profit.
Many traders who are new to foreign exchange (forex) trading spend a lot of time researching. Unlike the stock markets, which are open only during business hours, the forex market is open all the time, so that many first-time traders will work long hours. However, this can use up the trader’s savings and also leave the trader mentally drained. Hence the trader should understand the timings of the forex markets worldwide, activity and plan their schedule accordingly to get the best results working reasonable hours. The Best Times to Trade the Forex Markets are discussed below.
Unlike stock markets, the forex market worldwide is linked and is open from Sunday 5 pm EST to Friday at 5 pm. If two or more of the four major forex markets are open, the trading volumes will increase, and the currency pairs are more likely to fluctuate. If only one market is open, the spread for the currency pairs is limited to 30 pips. However, when two or more markets are open, the forex spread may be more than 70 pips, especially when major news related to the economy is released.
Research about Best Times for trading forex by Dailyfx.com
Experts from Dailyfx.com have analyzed over twelve million trades conducted by a large foreign exchange(forex) trader to find trends. It was noticed that the profit or loss of these traders depended largely on the day’s time. Most of these traders are called Range traders since their profit depends on market conditions to a large extent. The strategies for range trading involve buying low and selling high. Many traders make a loss because they are choosing the wrong time for trading. Hence many traders would like to find out When is the Best Time of Day to Trade Forex? So that they can plan their schedule accordingly and make a profit.
https://www.dailyfx.com/forex/technical/article/special_report/2011/12/12/When_is_the_Best_Time_of_Day_to_Trade_Forex.html
Thousands of forex trades were analyzed to find trends in the forex traders’ profits for five of the most popular currency pairs. While there are some daily fluctuations are observed, it is found that the trends are fairly stable. It is found that the traders are most likely to make a profit when forex/currency rates are less volatile. This is usually during the Asian, late US, or early European forex market trading sessions. While the range trading strategy is effective when the forex rate fluctuates less, the trader will lose more volatility.
The Best forex session to trade
After a lot of research, experts have noticed that for making a profit, European currencies should be traded during the period when major markets are closed, using a strategy for range trading. This corresponds to trading between 23 to 8 GMT (19 – 4 EST). Hence the trade filters should be set accordingly. The same strategy is not effective when the Euro currencies are volatile during peak trading hours. Making a profit Range trading in Asia-Pacific currencies is more difficult since the periods when currency rates are highly volatile and less volatile are less clearly defined than European currencies.
The best arbitrage opportunity is evidenced on Fridays (learn more about arbitrage in our article)when selling USD and buying EUR at 00:00 and selling EUR and buying USD at 03:00 the same day.
Overlaps in timings for forex markets
Since the price range in forex markets is higher when more than one market is open, there are more opportunities.
How news affects the forex market
Major news can increase the trade volumes during a period when few traders are active. If the news is drastically different from what was predicted, the currency value can fluctuate greatly in a few seconds. New economy-related information affects currency rates worldwide; however, only a few news types are relevant for forex traders. This news is interesting rate-related policy decisions, trade deficits, consumer consumption and confidence, CPI data, central bank meetings, GDP data, Unemployment rates, and retail trade-related information.
Conclusion
Forex traders should consider the overlap in market timings, economic news while deciding their trading schedule so that they have enough time to rest and other activities. Reading science research papers about this topic, there is no 100% rule about the best trading time for the forex market but based on Dailyfx research, the most profitable hours are low volatility hours.
He is an expert in financial niche, long-term trading, and weekly technical levels.
The primary field of Igor's research is the application of machine learning in algorithmic trading.
Education: Computer Engineering and Ph.D. in machine learning.
Igor regularly publishes trading-related videos on the Fxigor Youtube channel.
To contact Igor write on:
igor@forex.in.rs
