Forex (Currency Trading) | Jun 17, 2010 | 0 Comments

Forex Market Hours Primer

Forex is a decentralized market that’s open 24 hours a day, 5 days per week all around the world. Despite this, it’s not all roses. Action in the market goes in shifts. It’s not always the same. But, I’m getting ahead of myself. Let’s start out by going over the 4 market in the currency trading world.

The Forex market officially opens in Sydney on Monday morning, so you’ll want to look up when this is according to your local time zone. For those on the East Coast of the United States, it would be 5 pm Sunday.

The Forex market officially ends after the New York session on Friday, which is at 5 pm local time there. Again, look up 5 pm EST in relation to your local time zone to see when exactly the market closes for you.

Here’s a site that provides a world clock if you need it (opens in new window).

Using the EST time zone as our guide, here’s how the market hours look to start the week:

At 5 pm the Sydney market opens.

At 7 pm the Tokyo market opens.

At 2 am the Sydney market closes.

At 3 am the London market opens.

At 4 am the Tokyo market closes.

At 8 am the New York market opens.

At 12 pm the London market closes.

At 5 pm the New York Market closes.

The day is complete and the Sydney market is now open to repeat the cycle.

At CapitalistNation.com, I have created a chart that shows you what time it is and what markets are open. You might want to bookmark the page and use it until you get a hang for the market times.

This link opens up the Capitalist Nation page in a new window: Forex Market Hours.

There are times where it’s better to trade. The best time for you will depend what currency pair(s) you are trading.

The bulk of currency trading is done in London and New York. Tokyo and Sydney are the third and fourth currency markets as far as volume goes. However, that doesn’t mean you should ignore them. For example, if you’re trading the USD/JPY, you wouldn’t want to ignore the Tokyo session.

For many traders, there are two favorite time periods to trade.

The first trade period is from 2 am EST – 5 am EST. This three hour block has the end of the Tokyo session to start with and then it moves into an overlap of the Tokyo and London markets. It closes with the London market. Typically, this can be a great time to trade.

The second trade period is from 8 am EST – 12 pm EST and involves the two biggest markets. In this time period, the London and New York markets overlap and there’s usually a lot of action. Usually, you can see a significant slowdown after noon.

As I alluded to earlier, the currency you’re trading will dictate what time period is best for trading. During the Sydney session you won’t see the EUR/USD moving much, just like you generally won’t see the USD/JPY moving much for most of the London session.

As you trade, you’ll develop your own “optimal trade times.”