Open a forex account and enjoy a 24hr Forex Trading experience. Currencies are traded 24 hours a day, from Sunday afternoon EST* (Eastern Standard Time) to Friday afternoon EST. Through this 5+ day week of market activity, there is always at least one financial center open for business. Indeed, as some markets close for the night, others open somewhere else on the planet. Since forex trading hours overlap, currencies are being traded continuously. In other words, forex practically never stops.
Traders new to the world of foreign exchange tend to think that since the market is open 24 hours a day, they may trade whenever they choose during the day. Although this preconceived idea is actually true, it needs to be clarified. Indeed when it comes to forex trading hours, some hours present better opportunities than others. By better opportunities, we mean of course potentially greater profit. So what are the most suitable forex trading hours and why?
Usually, the best time to enter forex markets is when large volumes of currencies are traded. At those hours, traders can take full advantage of forex benefits. Since the forex market is traded 24 hours a day, the best time to enter is when several countries are trading at the same time. In each time zone across the world, forex markets operate from 8 am to 4 pm. So, to take advantage of heavy trading volume, the best is to look at when forex market hours in different countries overlap. Those hours are usually the time when the forex market is the most active and has thus the largest volume of trades and the biggest pip movements. It is when currencies are the most active that traders have a better chance of making some profit. Slow markets offer little chances of profit and therefore, forex traders usually stay out of them. When do forex trading times overlap?
To see when markets overlap, let's have a look at the different forex trading times in each main financial center across the globe. (Times are displayed according to EST) So here are the times when two trading sessions overlap:
New York and London: from 8 am to 12 am (EST)
Sydney and Tokyo: from 7 pm to 2 am
London and Tokyo markets overlap one hour, from 3 am to 4 am.
What does this mean? Trading EUR/USD, GBP/USD, or USD/CHF between 8 am and 12 am (EST) can lead to good results since markets for those currencies (European and American) are both active at the same time. This is when the largest volume of trades occurs, creating a greater chance of making significant profit in the forex market.
Another good time to trade is from 1 am to 3 am EST. As you can see in the table above, at that time, European markets are waking up while Asian markets are closing, offering good trade opportunities. The same goes for the 7 pm to 10 pm EST time period, when the Asian and Australian markets overlap.
Also, you have probably noticed that from 4 pm to 6 pm EST, there is no interesting overlap. That’s when the US markets close without overlapping any other large market. At those hours, the volume of trades is much lower, offering less great trade opportunities.
You can thus see that while you can take advantage of a 24hr Forex Trading experience, some hours will allow for better opportunities than others.
*EST = UTC** - 5 hours
**UTC= Coordinated Universal Time
While some hours of the day are busier than others, meaning that forex trading activity is greater at those hours, price fluctuation varies from day to day. As a general rule, some days of the week are busier than others. Whether in London, Tokyo, or the U.S., pip range movements for all 4 majors tend to be greater towards the middle of the week.
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