Forex trading sessions & market hours{3}

3. FOREX TRADING SESSIONS & MARKET HOURS

The forex market operates 24 hours a day, five days a week because it is a decentralized,

Global market. However, different trading sessions exist based on the business hours of major financial hubs worldwide. Understanding forex trading sessions and their impact on market liquidity, volatility, and price movements is crucial for traders looking to optimize their strategies.

1.       The four major forex trading sessions

 

The forex market is divided into four major trading sessions based on the financial centers

Session                      major financial hub           opening (GMT)                closing (GMT)

Sydney session             Sydney, Australia                 10.00pm                      7 .00am
Tokyo session                       Tokyo japan                   2.00am                         9.00am
London session                      London, uk                    8.00am                        5.00pm
New York session             New York, usa                    1.00pm                        10.00pm

 

Note the time above are in GMT (Greenwich Mean Time) depending on daylight saving session times may shift by one hours

 2. Breakdown of each trading session

1. Sydney session low liquidity & market open

 

Ø  GMT  10.00pm-7.00am

Ø  EST     5.00pm-2.00am

 

·         Sydney is the first market to open, marking the start of the forex trading day.

·         Liquidity is lower compared to other sessions, marking price movements less volatile

·         Best for trading AUD and NZD pairs because Australia and new Zealand banks are active

Currency pairs to trade

Ø  AUD/USD

Ø  NZD/USD

Ø  AUD/JPY

2. Tokyo session Asian session more volatility

GMT 12.00AM 9.00AM

EST  7.00PM 4.00AM

Ø  The Asian Session Is Led By Tokyo Which A Major Financial Center

Ø  Japans Yen JPY Sees High Trading Volume Because Japan Is An Export Driven Economy

Ø  Liquidity Increases But Is Still Lower Compared To London And New York Sessions

Ø  Good For Trading( JPY) Based Currency Pairs Like USD/JPY,EUR/JPY,AND GBP/JPY

 

 

Currency Paris To Trade

 

Ø  USD/JPY

Ø  EUR/JPY

Ø  AUD/JPY

Ø  GBP/JPY

Tip the Tokyo Session Overlaps With The Sydney Session, Increasing Activity In AUD And NZD Pairs

3. London Session Most Active & High Liquidity

GMT 8.00AM 5.00PM

EST 3.00AM 12.00PM

Ø  London Is The Largest Financial Hub In Forex Trading Accounting For Over 35% OF DAILY FOREX TRANSACTIONS

Ø  The Market Experiences High Liquidity And Volatility, Marking It One Of The Best Times To Trade.

Ø  Most Currency Pairs Experience Tight Spreads And Fast Price Movements

Ø  The Best Time For Trading Swing Trading And Scalping Strategies

Currency pairs to trade

Ø  EUR/USD

Ø  GBP/USD

Ø  EUR/GBP

Ø  USD/CHF

Tip the London Session Overlaps with the Tokyo Session 8.00am 9.00am GMT and the New York Session (1.00pm 5.00pm) GMT Making These Periods the Most Volatile

4. New York session strong volatility & major market moves

GMT 1.00PM 10.00PM

EST 8.00AM 5.00PM

Ø  The New York Sessions Is The Second Largest Trading Session Accounting For About 20% Of Daily Forex Transactions

Ø  High Volatility Especially When U S Economic News Is Released E.G NFP Interest Rate Decisions GDP

Ø  The Best Time To Trade USD Pairs Because The U S Dollar Is Involved In 80% Of All Forex Transactions

Ø  When London Closes At 5.00pm GMT Market Liquidity Reduces And Volatility Slows Down 

Currency pairs to trade

Ø  EUR/USD

Ø  GBP/USD

Ø  USD/JPY

Ø  USD/CAD

TIP THE BEST TIME TO TRADE FOREX IS DURING THE LONDON NEW YORK SESSION OVERLAP 1.00 PM 5.00PM GMT AS IT HAS THE HIGHEST LIQUIDITY AND FASTEST PRICE MOVEMENTS

 3. Best times to trade forex

Ø  Best Trading Time = High Liquidity + Low Spreads +Strong Market Movements

Ø  Avoid Trading During Market Opening And Closings Due To Unpredictable Volatility

 

Ø  Best Time To Trade London New York Overlap

 

·         GMT1.00PM 5.00PM

·         EST 8.00AM 12.00PM

 

Ø  High liquidity & volatility

Ø  Most price movements occur

Ø  Best time for day trading & scalping

Pairs to trade

·         EUR/USD

·         GBP/USD

·         USD/JPY

·         USD/CHF

Moderate trading time London session alone

Ø  GMT 8.00AM 1.00PM

Ø  EST 3.00AM 8.00AM

 

·         High Liquidity & Strong Price Movements

·         Best For Swing Trading & Short Term Strategies

Pairs to trade

·         EUR/USD

·         GBP/USD

·         EUR/GBP 

Currency pairs to trade

Ø  EUR/USD

Ø  GBP/USD

Ø  USD/JPY

Ø  USD/CAD

 

TIP THE BEST TIME TO TRADE FOREX IS DURING THE LONDON NEW YORK SESSION OVERLAP 1.00 PM 5.00PM GMT AS IT HAS THE HIGHEST LIQUIDITY AND FASTEST PRICE MOVEMENTS

 3. Best times to trade forex

Ø  Best Trading Time = High Liquidity + Low Spreads +Strong Market Movements

Ø  Avoid Trading During Market Opening And Closings Due To Unpredictable Volatility

 

Ø  Best Time To Trade London New York Overlap

 

·         GMT1.00PM 5.00PM

·         EST 8.00AM 12.00PM

 

Ø  High liquidity & volatility

Ø  Most price movements occur

Ø  Best time for day trading & scalping

Pairs to trade

·         EUR/USD

·         GBP/USD

·         USD/JPY

·         USD/CHF

Moderate trading time London session alone

Ø  GMT 8.00AM 1.00PM

Ø  EST 3.00AM 8.00AM

 

·         High Liquidity & Strong Price Movements

·         Best For Swing Trading & Short Term Strategies

Pairs to trade

·         EUR/USD

·         GBP/USD

·         EUR/GBP