Knowing what time the forex market operates is an essential part of being a pro trader. But it's also not enough to just know when you can trade, you also need a solid understanding of the best times to trade. This will help you avoid any pitfalls by opening trades during quiet times or just when there is going to be a burst of movement.
So let's begin by finding out when the markets actually trade…
What time can you trade Forex?
The currency markets operate 24 hours a day. This could possibly change for each broker, but in general you'll be trading Monday to Friday.
For example on my broker, etoro, the currency markets open Sunday 22:05 GMT time and close Friday 21:30 GMT. They operate 24 hours a day. Why? Because the market sessions overlap. When New York closes, Sydney will be open and then Tokyo and London will come online a little later. London will overlap with New York.
What time of day has the most activity?
The most trading activity will take place when the London and New York markets overlap. But this does depend on the currency pairs you'll be trading. Generally there is more activity for a pair when both the markets for that pair are open. For example with the GBP/USD pair – the most activity will take place when the London and New York sessions are trading.
When is the best time to trade?
It's hard to pinpoint an exact time, but according to some research, traders have been most successful when trading during the late U.S, Asian and early European sessions. This was based on analysing thousands of traders. This was also based on a “range trading” strategy. If you trade another strategy then this will be meaningless.
Being Alert to the Fundamental Calendar
If you've been trading for a bit, you'll soon learn to anticipate when an increase in trading volume will occur based on when sessions open and close. But you also need to be alert and aware to fundamental forces. Releases of economic data and government reports will have a dramatic effect on trading volume. You must use a calendar which shows you when economic news is coming out so you can be prepared. You may wish to sit out these periods to avoid the increase in risk and volatility.
The best way to learn about forex market hours…
The best way to get to grips with how the forex sessions work is to try practice trading with a demo account. This way you're not putting any of your own money at risk. It didn't take me long to get a feel for the different sessions worked by using a practice account and in my opinion its the best way to learn. Make sure you keep an economic calendar open, check in with any daily market reports and if you're trading anything other than currencies, make sure you're aware of the specific market times for that product.