Forex Trading Sessions
Now that you know what Forex is, why you should trade the forex market and what makes up the forex market, it’s time to understand the Forex trading sessions.
It is true that the forex market is open 24 hours a day, but that does not signify it is still active all day. However, for most brokers and individual investors, every day of the week is not available for trading. You can make a profit trading when the market goes up, and as well as when the market moves down. But, you will find it hard to make a profit when the market does not move a bit.
This article will help you understand the forex trading sessions.
Market hours
The forex market does not include an official opening and closing market schedule, taking into account it never ends transactions. However, the closing of the New York market (16 hrs GMT) was adopted as a trading day closing term for those who trade only 5 days per week. Each country has its own market opening and closing time. New Zealand is the first country on the globe to open its market, followed by Australia, Asia, Europe and eventually the American market.
The opening and closing times all depends on local times, with most opening hours beginning somewhere between 7-9 am local time. The opening and closing hours vary during March/April and October/November as some countries (such as Australia, England and United States) switch to daylight saving time (DST). The day of the month when a country moves to DST also varies, which makes it even more confused. Japan does not observe summer time, so thanks to Japan for staying still.
Below is an image that demonstrates the elapsed time of each transaction schedule of the first zones. Note that there is a coincident schedule sometimes.
The Trading Sessions
Regardless of your investment strategy, it is always best to have it in mind that there are 4 major trading sessions on Forex. When you become aware of this, you can take advantage of these sessions because you now have “competitive advantage “over other traders.
The 4 major trading sessions are the London session (the favorite of many traders), the Sydney session, the New York session and the Tokyo session.
The first trading session opens in Sydney. In a little while after, the Tokyo session opens – also called (Asian session), since the sessions of other significant economies of this part of the world open after Tokyo, such as Hong Kong and Singapore. Next comes the London session. London being Europe economic center (at least for now), the European sessions are called the London session.
Finally, the American session known as the New York sessions, this involves other vital economic centers like Toronto and Chicago.
Below are the tables of opening and closing hours of each session:
SUMMER
Session | Timetable (GMT + 0) |
Sydney – opening | 22:00 |
Tokyo – opening | 23:00 |
London – opening | 7:00 |
New York – opening | 12:00 |
WINTER
Session | Timetable (GMT + 0) |
Sydney – opening | 21:00 |
Tokyo – opening | 23:00 |
London – opening | 8:00 |
New York – opening | 13:00 |
If you notice there is a period between each session where the sessions overlap. Between 07:00 and 08:00 GMT +0, the London and Tokyo sessions overlap, and between 12:00 and 16:00 GMT +0, the New York and London sessions overlap.
Unsurprisingly, the most active of the trading day is these hours, as more volume is available when two markets are open simultaneously. Signifying more traders, more trades, and more volumes.