The Forex market is an OTC market without a physical location and is open 24 hours a day
Forex Market time zones
The Forex market is an OTC market without a physical location and is open 24 hours a day, exclusion made for Saturday and Sunday. When we talk about trading in the Forex market, time zones are particularly important, as they affect the trading hours, as they can cause confusion. Although forex trading is understood to be a all day activity, care must be taken to ensure that the profit opportunities the market generates have the same value. The Forex market opens on Sunday evening at 11 pm and closes on Friday evening at 10 pm. The first session to make an appearance is Sydney, then there is the Tokyo session, then the London session and finally the New York session. The first 2 are shown in the Asian session, while London is the equivalent of the European and New York session, the American one. To understand Forex timetables, it is essential to understand this point well.
Forex market opening hours
Sydney: 21-06 (summer time 22-07)
London: 08-17 (summer time 07-16)
New York: 13-22 (summer time12-21)
We must not only consider the times of course, but also the volumes of exchange that occur in the various sessions. Exchange volumes means the number of exchanges that take place at that particular session.Obviously, a session with higher trading volumes will present greater trading opportunities than a session in which the trading volume is smaller.
Session exchange volumes
London with 36% of the daily forex volume
New York 18% of the volume
Tokyo 12% of the volume
On all the sessions are the same; as a result, not every day is the same! In fact, there are days when the market is richer and days when it is decidedly poorer. The best days go from Monday to Thursday. In these days a large number of transactions occur and as a result, you have more trading opportunities. The choice of the moment in which to trade in Forex is therefore very important; only in this way can you obtain appreciable results in the Forex market.
What is the best time and day to trade in Forex?
The best times to trade are those in which the market is most active or the time when the market has the highest number of trades; consequently the best times are those in which multiple sessions overlap
London-New York: from 14 to 17
Sidney – Tokyo: from 23 to 8
London – Tokyo: from 9 to 10
These times are compared to the Wienna- Rome time. The days to be avoided are instead Friday, the second part of the day and Sunday, which is weak because the markets open at 23. Even the days of celebration are not recommended, people do not like to trade during the holidays, therefore, the market is “more limpid” and the opportunities to make money decrease, much better you will take the deserved vacation as everyone does.
The worst time to trade Forex
– 12.00 and 14.00. In this time slot, the market calms down at the lunch break.
– 10.00 pm and midnight. In this period only Australia is operational; as a result we have low liquidity and minimal movements.
– 1 hour before the opening of the London and New York markets; in this period of time it is inadvisable to open a position as the sessions are divided and the trends generated in a session can be overturned by the traders of the next session.
In short, when the sessions do not overlap, that is, the Asian and American sessions are open but do not overlap with the European session, there are no big movements except that important news does not occur. In this period everyone is free to trade, but we also advise against it because the potential movements are very low compared to peak times.
In my opinion, the noteworthy exchanges are those of Tokyo becouse for this very often it happens that when we talk about the Asian session we refer only to the Japanese one. Liquidity is limited, as are volatility and movements, and these are usually not known.All trades generated by the Asian session represent about 20 percent of total traffic in Forex volume.
In this session, trading volumes represent 50 percent of all total Forex volume, with London being the main square followed by Frankfurt. It is usually the London square that records the best opportunities to trade.
In this session, the following currencies are exchanged:
Euro – EUR
British Pound – GBP
US Dollar – USD
Swiss Franc – CHF
With this session you can have excellent price movements, when there is an overlap with the European one. After this period they become less interesting; despite everything, however, the American session collects about 30% of daily Forex traffic.
For this reason I believe that the best times to trade on Forex are:
– late morning
– early afternoon
I believe that the most profitable times are those in which the various sessions overlap as follows:
– overlapping of the European and American sessions from 2.00 pm to 5.00 pm and 3.00 pm to 6.00 pm
– overlap between the Asian and the European sessions is less important