Forex Trading Sessions: Which is best for you?
You’ve probably heard that the forex markets are open 24 hours.
But which of the forex trading sessions is best for you?
Should you trade earlier in the morning, or later at night?
Depending on where you are, you can have a completely different trading day for someone on the other side of the globe.
Keep reading to learn more about the forex trading sessions available to you:
What is a forex trading session?
A forex trading session is a time period during which people are able to buy and sell currencies.
The forex market is open 24 hours a day, but it can be split up in different ways:
- Forex sessions by geographical area
- Forex sessions by time zones (specifically the peak times)
- Forex sessions that are based on liquidity or volatility.
This article will focus on the first two – the best forex trading hours for your geographical location, and the peak times of each week based on various time zones.
What Are The Forex Market Hours?
The international currency market is a vast and complex web of exchanges, brokers, financial institutions. This network spans the globe with markets in every corner on Earth: America to Asia; Europe to Africa.
The Forex market is the largest financial market in the world and trades 24 hours a day, but it has different closing & opening times times for each country.
The four major Forex sessions are:
- New York
Sydney is the first major trading day of each weekday, but it’s New Zealand that begins the process.
Due to it being a global market the Forex markets open and close at staggered hours, with traders in one market looking for opportunities to trade currencies while the other is still active.
Forex Trading Sessions in Asia
The Asian forex trading sessions are spread over a large time period, but there is one clear peak time when liquidity is at its highest; this is particularly noticeable between Hong Kong and Japan’s business hours.
The Asian session typically begins at 01:00 and spans through to 10:00 GMT
These times align with Australia’s trading sessions so this allows for some great correlation between other markets and Asia.
The Asian Forex markets typically observe the same peak hours as the US time zones.
In general, liquidity starts to increase in the late afternoon in major currencies like the EUR and USD and then it becomes most active between 9:00 pm – 11:00 pm.
Forex Trading Sessions in Europe
As you might expect, the major Forex trading sessions are centered around the London and Frankfurt exchanges.
The European session is fairly similar to that of London’s with decent liquidity between 6:00 am – 3:00 pm GMT followed by a peak between 7:30 pm and 8:30 pm.
This is possibly due to the fact that London and Frankfurt time zones are offset by roughly 1 hour (UTC/GMT +1).
This session has the most liquidity flowing through it due to the overlap of the European and New York trading sessions.
Forex Trading Sessions in USA
There is a clear peak in activity centered around the New York session, which begins at 13:00 GMT and closes at 22:00 GMT.
During this time there is a lot of overlap with London, thus making this the best time to trade for a couple of reasons we’ll get into later.
Forex Trading Sessions Based On Volatility & Liquidity
In addition to geographical area, it’s important to consider the volatility & liquidity of each forex session.
This is because these factors don’t solely rely on where you are, but also what time it is.
Some forex trading sessions are more volatile than others – so if your strategy relies on volatility to be successful then you must adjust your strategy accordingly.
The spreads widen significantly due to less trade activity, which can give a disadvantage considering how much size you choose to trade with.
If you are trading Forex strategies which rely on high volatility and liquidity then you should be focused on sessions in Europe/New York.
A swing trading approach can have great success in the Asian markets due to the more predictability these trading sessions are.
The most notable shift here comes between New York and London – which changes from 13:00 GMT.
The spreads shrink massively, giving a much more competitive trading environment.
This is most ideal for scalping the markets.
This is where you should be looking to place most of your trades if you’re trying to maximize profits with fewer costs of trading.
Which Forex Trading Sessions are Best for You?
Think about it…
If you have a strategy that relies on volatility or high liquidity, make sure you’re trading during New York and Europe’s peak hours.
(It’ll be also more cost-effective to trade during these periods too).
If not, use the Asian session for your trades instead.
Europeans have the greatest advantage for lower cost of trading and highest liquidity sessions.
You can even use this tool to view the markets that are currently open to aide your decision:
As you can see, there are many factors that go into deciding which forex trading session is right for your needs.
The best part of this article?
You now have all the knowledge to make the perfect decision and be successful in the market no matter what!
If you found value in this article, let us know by sharing it on social media or commenting below. Happy trading!