Certain times of the day are better when trading forex. Just because forex is a 24-hour market doesn’t mean it’s always active the whole day.
There are four major trading sessions in the forex market: the Sydney session, the Tokyo session, the London session, and the New York session. Below are the summer and winter hours that each one opens and closes.
|Sydney Open||6:00 PM||10:00 PM|
|Sydney Close||3:00 AM||7:00 AM|
|Tokyo Open||7:00 PM||11:00 PM|
|Tokyo Close||4:00 AM||8:00 AM|
|London Open||3:00 AM||7:00 AM|
|London Close||12:00 PM||4:00 PM|
|New York Open||8:00 AM||12:00 PM|
|New York Close||5:00 PM||9:00 PM|
Winter (approx. October – April)
|Sydney Open||4:00 PM||9:00 PM|
|Sydney Close||1:00 AM||6:00 AM|
|Tokyo Open||6:00 PM||11:00 PM|
|Tokyo Close||3:00 AM||8:00 AM|
|London Open||3:00 AM||8:00 AM|
|London Close||12:00 PM||5:00 PM|
|New York Open||8:00 AM||1:00 PM|
|New York Close||5:00 PM||10:00 PM|
The London and Tokyo sessions overlap during the summer from 3:00-4:00 am EDT and the London and New York sessions overlap between 8:00 am-12:00 pm ET. These overlapping sessions are the busiest time of the day for the market because when two markets are open at the same time there is more volume. Also more money is transferring hands when volume is high.
Below is a table of the average pip movement for the major currency pairs:
The European session usually provides the most movement.
Tokyo is the financial capital of Asia, so the Tokyo session is sometimes referred to as the Asian session. The opening is at 12:00 am GMT. Also, the yen is the third most traded currency and Japan is the third largest trading center in the world. Pip ranges for the Asian session are listed in the table below:
These averages can vary depending on market conditions and liquidity. These are NOT absolute zeros. Let’s list some key components of the Tokyo session below:
Japanese companies are doing a lot of business during this time and a lot of yen is exchanging hands. It’s important to keep an eye on yen pairs during the Tokyo session. Keep a watch on news events from Japan, New Zealand, and Australia during this time.
China is an economic superpower that relies heavily on demand from Australia and New Zealand. When news comes out from China, very often we see movement in AUD and JPY pairs.
London is the financial center of Europe and considered to be the forex capital of the world. It has always been the center of trade throughout history. As the Asian markets are closing up show, the London session is just beginning. Lets look at some pip ranges for the major currency pairs below:
Once again these averages can vary depending on market conditions and liquidity. These are NOT absolute zeros. Let’s look at some key components of the London session below:
Due to huge amounts of liquidity during the London session, almost any currency pair can be traded. The majors usually have the tightest spreads and are mostly influenced by news reports that come out during this period.
Yen crosses are also good to trade during this time and are quite volatile. However, spreads will most likely be a little wider.
Traders start arriving at the office at 8:00 am EST, just as the European traders are getting back from taking their lunch break. New York is the major financial center of the United States. Let’s look at some pip ranges of the major currency pairs below:
Once again these averages can vary depending on market conditions and liquidity. These are NOT absolute zeros. Let’s look at some key components of the New York session below:
The amount of liquidity taking place during this session allows you to trade all the currency pairs, but it’s best to stick to the majors. Remember to pay attention to the economic data reports as the US dollar can jump up and down from them.
Liquidity is at its highest during times when more people are participating in the forex market. The overlapping sessions provide high liquidity, but also have slow periods. Let’s breakdown the two overlapping sessions to see why.
It is very quiet during this overlap session for a few reasons. The Asian session typically doesn’t have much movement and people are just getting to their offices for the European session. This is a good time to look for trades for the London-New York session.
This overlap is the busiest time of day because traders from the two biggest financial districts are battling it out. News reports from Europe, the US, and Canada all have big impacts on the market. Choppy moves happen as some European traders close their position around lunchtime for traders in New York.
Certain days of the week have more movement than other days. Tuesday, Wednesday, and Thursday have the most movements. Lets look at the major currencies pip ranges for each day of the week below:
Fridays are technically half days as the market drops dead after 12:00 EST till it closes at 5:00 EST. It is prudent to manage your time wisely. Learn when to trade and when NOT to trade.