We will talk about the Forex Market Hours. We will talk in which timezone the Forex Market operates and how it so happens that the Forex Market is so different to any stock market in the way that it works 24 hours a day, for this tutorial. We’ve got a Time axis and the way to read it is from right to left because the sun rises from east to west that axis is in a GMT time and then we’ve got the four main Forex sessions starting from the bottom to top as they commenced. Through a new day.
So the first one is the Sydney session then it’s a Tokyo session then it’s London session. And then it’s the New York session. So what can we see from this visualization of the Forex Market hours and how can we use this in our trading? So, the Australian session that the very first session to open during any given day is the Sydney Forex Market session and Australians are the First Nation to wake up into a new day. It’s still for 22 hours. So 10 p.m. Of the previous day in London when Sydney banks open up. So this means that if you live in Europe or in the US and it’s Tuesday, then you can already trade the Wednesday Sydney Forex Market session and that’s just a mind-blowing fact that I was very interested to learn when I first got into Forex also you may ask what about the New Zealand session and that’s a Fair Point New Zealand is located even more to the right from Australia and the New Zealand session starts about two hours before the Sydney session. However, without the Australian session, the liquidity on the New Zealand market is very low and so that’s why people focus on the Sydney session rather than in New Zealand session, moving on. The next session is the Tokyo session which follows shortly after this session is also called the Asian session. Because right off the Tokyo large economic hubs like Singapore and Hong Kong start waking up the Asian session starts around midnight GMT when most of Europe is still in a deep sleep and this is why you often hear European traders talking about waking up at 3 a.m. Just to trade the Asian session before going back to bed. Also, you may have already noticed that some of the Forex sessions overlap quite significantly. For example, the Australian session and Asian sessions overlap for the Majority of the Forex Market Hours and the good news is that you can use this knowledge to your advantage. Naturally when these two sessions overlap currency pairs like the AUDJPY and the NZDJPY will have their highest volatility. The next session that follows the Tokyo session is the London session. Undoubtedly, London is the economic Center of Europe and it’s essential that the European session is also called the London session moreover, By the time banks open up in Great Britain other major economic hubs like Frankfurt, Luxembourg and Zurich have already started into their Forex Market Hours for the day an interesting observation. Is that the Forex hours of the Tokyo and London sessions overlap for approximately one hour and this varies a little bit for other European countries, and you can and you probably should use this fact to your advantage this slight overlap means that all of the crosses of European currencies and the Japanese Yen will have their highest volatility at the start of the European session. So if you’re trading the British pound Japanese Yen, for instance. You can simply carry out a few very powerful trades between 8:00 a.m. And 9:00 a.m. GMT and then you’re free for the day and some Traders actually do that. They capitalize on this narrow window of time when both sessions are open. They take the most out of the movements of volatile currency pairs like the GBPJPY, and then they finished their trading very early on in the day and they have the rest of the day for themselves. And finally, the last session to open up is the New York session Forex Market hours in the US start with New York. And this is because New York is one of the biggest Financial Centers in the world and it is the East most major city in America. The American session also includes other major economic hubs like Chicago, which is the world’s largest derivatives market and let’s not forget about Toronto which is a major Canadian Financial Hub.
So what happens when you put more firewood into a fire? That’s right. It burns even harder and saying thing happens here New York and London are the two of the world’s biggest Financial Centers and the American session starts when the European session is only halfway through and of course you’re going to get an extremely fast-paced and volatile market during that overlap. And once again, you can profit from this a lot of the major pairs like the EURUSD GBPUSD and the USDCHF experienced massive movements and specific patterns during this time. And finally, to sum up, the Forex Market hours. Let’s have a look at the end of the New York session, even though the Sydney session and the New York session do not overlap. They follow each other back to back and this illustrates why the Forex Market is open 24 hours a day. If you take any time zone on this map at least one for accession will always be open and in the end. I’d like to say that whatever your trading strategy is it is Is beneficial to keep in mind the Forex Market hours or the Forex sessions This is because different sessions are dominated by different types of Traders, Banks, governments, and as we discussed different types of currency Pairs and taking this into account will certainly give you a competitive advantage over other Forex Traders.