Understanding Forex Trading Hours Across Different Countries

The forex market is a global market that is open 24 hours a day, except on weekends. Traders from different regions participate in the forex market based on their time zones.

The best trading hours and timing for the forex market are divided into four periods: the Sydney period, the Tokyo period, the London period, and the New York period. However, some traders divide the forex market into three periods: the Asian period (Tokyo period), the European period (London period), and the North American period (New York period).

The characteristics of different trading periods in the forex market and the selection of trading timing

As a trader, it is crucial to understand different trading periods and execute your trading strategy accordingly, which will help you determine which period is most suitable.

1. Sydney trading period

Sydney time is the first open time. Summer time starts at 10 p.m. GMT, and winter time starts at 9 p.m. Greenwich Mean Time. The trading period ends at 7:00 a.m. GMT in summer and 6:00 a.m. Greenwich Mean Time in winter. The overall volatility and liquidity during the Sydney period remained low and gradually increased in subsequent periods. Traders usually avoid trading periods with low liquidity and volatility, as they offer fewer trading opportunities.

You should consider trading Australian and New Zealand dollars during the Sydney session.

2. Asian trading hours

The Asian or Tokyo trading period starts at 12 a.m. Greenwich Mean Time in the summer and winter and ends at 9 a.m. Greenwich Mean Time in the summer and winter The forex market has shown upward momentum during the Asian period, and many traders use the Asian period to measure the future trends of the forex market. The Asian period accounts for approximately 6% of the total trading volume.

The Asian or Tokyo period is known for its low liquidity and volatility, which makes it easier for traders to determine their entry and exit points. Traders can easily adopt risk management strategies because they can quickly respond to adverse market trends and change their strategies accordingly. Traders can take advantage of breakthrough opportunities during overlapping periods starting in London or Europe. During the overlap period, liquidity and volatility begin to increase, leading to breakthroughs.

You should consider trading the cross of the yen, Australian dollar, Singapore dollar, and New Zealand dollar in the Asian session because these currency pairs are most active in that session.

3. European trading hours

As the world's economic center, London accounts for over 35% of the total transaction volume. Other important European cities participating in the European period include Frankfurt, Milan, and Amsterdam. The European trading session is known for its high liquidity, as large financial institutions and banks trade in the forex market in London and conduct financial business during the European session.

You can enjoy high liquidity, volatility, and low spreads during the European period. At the end of the London or European session, as European traders lock in some gains, the trend sometimes reverses. Due to high liquidity and volatility, you can trade almost any currency pair, but the most traded currency pairs during the trading period include EUR/USD, GBP/USD, USD/CHF, USD/JPY, EUR/JPY, and GBP/JPY. And due to high volatility, you need to be careful with your risk management strategy when executing trades, as sudden market fluctuations may disrupt your account.

4. US trading hours

New York is the central city of the US trading period, accounting for approximately 15% of the global daily trading volume. During periods of overlap between European and US periods, volatility and liquidity remain high. However, as the European session ended, the trading momentum weakened. Other financial centers, such as Toronto and Chicago, have also contributed to trading during US trading hours.

Due to the fact that the US dollar participates in approximately 85% of forex trading, the US trading period is extremely important, as most of the fluctuations in the US dollar occur during the US trading period. The main economic reports and data are released during the US period, which usually triggers significant fluctuations in the US dollar. On Friday, you can see a reversal of the trend as most US traders close their positions in the latter half of the US trading session to protect themselves from the impact of major news events overnight.

To become a successful trader, you should know the opening and closing times of each of the four time periods. Some traders in Asia prefer to trade during US trading hours to capture the main trend of the US dollar, while others in the US prefer to trade during European trading hours. Each trading period has its own advantages and disadvantages, and you should decide which trading period to trade based on your trading style and strategy.

Disclaimer: Investment involves risk. The content of this article is not an investment advice and does not constitute any offer or solicitation to offer or recommendation of any investment product.