Forex market trading sessions

What time does the forex market open? Beginners might ask. The answer is: it is always open 5 days a week, enabling traders and inventors to capitalize on opportunities 24 hours each day. However, understanding the Forex market is critical before it is possible to make profits, and Forex schedule and market sessions are crucial concepts in trading. In this guide, we will demystify market hours, explain session overlaps and their significance in trading, and provide explanations on how trading conditions are impacted by the global financial centers and their respective time zones. You, as an FX trader, need to know these details for success in this dynamic market. So, let’s begin.

Start Trading in 10 Minutes

Apply everything you’ve learnt on a real trading account with up to 1:2000 leverage, negative balance protection and outstanding support.
Get Started

Forex market hours explained

The term Forex hours in FX means the continuous cycle of trading that happens across major financial hubs or centers. Unlike stock markets, which are known for their fixed opening and closing times, the FX market operates 24 hours a day, from Monday to Friday. It opens in one part of the world and closes in another part of the globe, which makes it a unique market. Since the FX market is primarily decentralized, this continuous cycle is possible and available for traders across the globe, no matter their time zone. When discussing the Forex market schedule, it is essential to consider the impact of global economic news events. For example, key economic announcements such as employment rates or central bank interest rate decisions happen during specific session hours, and it is crucial to monitor the economic calendar. Forex news events are crucial events that have a history of high volatility and can cause large price swings, which makes them very risky for beginners. This is why traders need to be aware of the major economic data, together with the session opening times, to anticipate these important events and implement proper risk management. When sessions overlap, such as London and New York, the volatility and liquidity are the highest, and the market tends to move fast and cover more distance (pips), which not only creates numerous opportunities for large profits but can also cause losses. Another factor to know about is local holidays, which can also play a role, as various financial centers might close or have reduced activity on certain days. Thinner trading volume caused by local holidays typically leads to wider spreads, which increases trading costs for traders, and the price reliability also gets affected. 

Forex Trading Sessions: An Overview

Major forex trading sessions are when New York and London trading sessions cross. During this time, volatility is perfect for any scalping strategy. However, other sessions are also crucial in trading and every trader must know when they are at play to properly plan their trading schedule. 

The Sydney Session (Asian Early Bird / Oceania Focus)

Among the four Forex trading sessions, the Sydney session is the first to open. The typical opening time is 5:00 PM EST (22:00 GMT) on Sunday. The main centers are Sydney in Australia and Wellington in New Zealand. The most actively traded major currency pairs include AUD/USD, NZD/USD, AUD/JPY, NZD/JPY, and AUD/NZD. This session is known as the “quietest” among sessions. However, the Sydney session is important as a tone-setter for Asian Day. During this session, pairs react strongly to Australian/New Zealand economic data as well as Chinese news due to AUD’s commodity link. The liquidity is typically thinner and sometimes spreads are higher, making it fairly challenging to employ scalping strategies. The volatility is typically low to moderate as a result. 

Despite low volatility and higher spreads, Sydney sessi00on is still viable for range traders and position traders for entering and exiting AUD/NZD positions, to react to Oceania data. 

The Tokyo Session (Asian Powerhouse)

The Tokyo trading session opens at around 7:00 PM EST (00:00 GMT) and key centers include Tokyo, Singapore, and Hong Kong. Most active currency pairs include USD/JPY, EUR/JPY, AUD/JPY, NZD/JPY, and GBP/JPY (The "Yen Crosses" shine here). When compared to the Sydney Session, the Tokyo Session is the heart of the Asian trading day and brings significantly more liquidity to currency pairs. Japanese Yen pairs are active during this time and any news on Bank of Japan (BoJ) interventions has a major impact on Yen pair rates. However, this session also reacts to broader Asian economic data, especially from China. This session is where we can often see strong trends, especially in JPY pairs. Typical Tokyo Session volatility is from moderate to high and is the best time for trading JPY crosses, reacting to Japanese and Asian economic data, and following trends during active phases. 

The London Session (The Global Hub)

The London Session is where we start to see more volatile forex trading sessions as the city is a global financial hub. The London session opens at around 3:00 AM EST, which is 08:00 GMT, and key centers involved include London, Zurich, Frankfurt, and Paris. All major currency pairs see serious reading volumes during the London Session, including EUR/USD, GBP/USD, EUR/GBP, GBP/JPY, and USD/CHF. The London session can be very volatile and is highly liquid, while some traders call it the most liquid session, the most liquid one is when London and New York sessions overlap. The London session is known for setting a main trend direction for the trading day for many currency pairs. The high volume of institutional trading can also be noticed during these times. The session reacts strongly to Eurozone data (Eurozone GDP, German IFO, UK CPI, BOE/ECB announcements). Anyone trying to trade during this session must monitor the economic calendar for high-impact news events, which is even more true during the New York session. Volatility is also higher especially when major news is released and careful trading is advised. As the typical volatility is high during the London session, best practices are trend trading, breakout strategies, high-volume scalping, and trading EUR and GBP pairs. The real action begins with the start of the London session. 

The New York Session (The American Engine)

The New York Session opens at 8:00 AM EST which is around 13:00 in GMT. The main financial centers include cities like New York, Chicago, and Toronto (Canada). Key characteristics of the New York trading session are the deep liquidity and high volatility it offers. Markets are most active during these hours and when London and New York sessions overlap European institutional flow combined with massive US liquidity. The session has the highest trading volume globally and whale spreads are the lowest. 

As the trading sessions with the highest volatility, the NY session typically has the most significant price movements (pips covered). US data releases such as NFP and others occur during this session and constantly shake markets left and right. This amplification of moves is very attractive for traders as this is where major daily trends are confirmed or reversed. 

The one reason why this session is absolutely crucial in every trader’s life is because the NY session provides the absolute best opportunities to capture large moves quickly. This is essential for scalpers and day traders. However, due to heightened volatility, it requires superior discipline and strict risk management due to speed and potential slippages.

Start Trading in 10 Minutes

Apply everything you’ve learnt on a real trading account with up to 1:2000 leverage, negative balance protection and outstanding support.
Get Started

Forex Market Schedule and Time Zones

Forex markets are always open in a continuous 24-hour cycle, as sessions open and close, overlapping each other ensuring the FX market never sleeps for 5 days per week straight. As Sydney closes, Tokyo opens, London takes over and New York hands back to Sydney. Depending on the trader’s locations they might use GMT or UTC and it is always advisable to know when the most liquid sessions are open as trading is most profitable during those sessions. 

Daylight Saving Time (DST)

Sessions shift twice yearly:

  • London moves from 08:00 to 07:00 GMT in March
  • New York changes from 12:00 to 12:00 GMT
  • Sydney shifts from 22:00 to 21:00 GMT

It is advisable to always verify the session times during DST transitions. 

Main timestamps for reference

Very often, hours for trading sessions are given in local time zones like EST, and it is crucial to have a converted list of corresponding GMTs:

  • Sydney 5:00 PM EST = 22:00 GMT
  • Tokyo 7:00 PM EST = 00:00 GMT
  • London 3:00 AM EST = 08:00 GMT
  • New York 8:00 AM EST = 13:00 GMT

Forex's weekly timeline starts on Sunday at 5:00 PM EST (22:00 GMT) and closes on Friday at 5:00 PM EST (22:00 GMT). 

Beware: Weekend gap risk!

More often than not markets open with a gap on Monday, this is because while the markets are closed for traders and other general audiences, international banks still exchange currencies and assets also tend to change in price due to news and other high-impact causes. This typically ends in a gap, meaning the price at which assets open on Monday is way different than what was on Friday which creates a risk of passing your stop-loss and has a serious potential for both big losses and profits. If you leave the trade open during weekends, you can not close it even if the news is bad. 

Major holidays like Christmas, U.S. Independence Day, Japanese Golden Week, and so on typically slash liquidity by 70%, meaning the markets are moving very slowly while spreads are large. Erratic price spikes are also common occurrences despite low liquidity, which creates serious risks for traders to lose money due to sudden volatility. 

Volatility patterns exposed

As we have mentioned each session has a different volatility pattern: Sydney (low) > Tokyo (moderate) > London (High) > LON/NY overlap (Peak) > NY Close (Low).

The main reasons why overlaps expose volatility are liquidity surge, dual-region participation, and the amount of major news released during overlaps. As more regions participate simultaneously, many high-impact news both from the EU and the USA shake the markets while dual regions supply markets with deep liquidity. 

News-driven volatility spikes such as NFP, CPI, and similar cause 5-10x average volatility, and large price swings occur. 

Best times to trade Forex markets

Depending on your trading style and strategy, different sessions might be optimal to maximize profits. Scalpers who open many small trades throughout the day should trade during London and New York overlap and New York open and avoid Sydney and late NY sessions. Day traders should focus more on the London session and NY morning while avoiding Tokyo Lunchtimes. 

Swing traders will find the best setups during late NY and Sydney and they should try to avoid news events. News traders should focus their attention on 8:30 AM EST for US data as most of the high-impact US news is released during this time. News traders should avoid low-volatility windows. Generally, it is better to trade during several session overlaps and avoid trading on Holidays and Friday evening hours when volatility wanes and spreads widen.

Forex session guide for beginners 

Here is a perfect approach if you are a beginner trader and want to use Forex trading sessions to your advantage:

  1. Start local - It is best to align your local time with the most volatile sessions like London or New York. If you are from the Asian continent then going for the Tokyo session is the best option. 
  2. Overlaps matter - Enter overlaps with smaller than usual position sizes to reduce the risk of ruin if something unexpected happens. 
  3. Economic calendar - Always use the economic calendar to monitor when high-impact news is released. 
  4. Broker times - If you can not set your platform to your local time zone, find out the hour difference between you and the platform.
  5. Volatility tools - Monitor ATR (Average True Range) or volatility indexes to know when markets are more volatile than usual and reduce position sizes.
  6. Friday rule - Close all positions by 4:00 PM EST to avoid high spreads and gaps.
  7. Holiday rule - By not trading during major holidays like Christmas or New Year’s sessions, you can avoid high trading costs and unexpected price spikes. 

Forex trading session mistakes to avoid

Knowing what to avoid is as important as knowing what to do. Beginners typically make similar mistakes and by reading the below tips you can optimally use trading session knowledge while abiding by common pitfalls:

  • Trading GBP/USD during the NY session - GBP is active during the London session
  • Trading breakouts during Sydney session - Liquidity is low
  • Ignoring DST shifts - Missed opportunities
  • Overtrading during calm markets like Friday evening weekends
  • Trading or holding EUR/USD during the NFP announcement - Very bad idea!
  • Open trades over Japanese Golden Week or any other major holidays

By knowing these details, FX trading becomes easier as traders better anticipate major time windows when to trade or to avoid open positions.

Axiory uses cookies to improve your browsing experience. You can click Accept or continue browsing to consent to cookies usage. Please read our Cookie Policy to learn more.