Forex trading can be done 24 hours a day for 5 days a week. You could say, the forex market is open without any rest or sleep.
For traders, of course this is fun because it has the opportunity to multiply profits at any time. Trading activities do not have to collide with office work hours or time with family.
However, forex trading time is divided into several sessions and not every forex trading hour is always crowded.
There are days when activity is busy, but there are also times and hours when trading is quiet even though it is still the forex market opening hours.
Also read: Hierarchy and Forex Market Structure that Traders Should Know
The more forex markets, the greater the chances of making a profit; While the quieter the market, the less chance of profit. So, insight into the time and hours of forex trading is very important for traders.
You can adapt your trading strategy to the character of each forex trading session. The goal is to get the most out of each of your trades.
Forex Market Time (Market Hours)
First of all, we should know that the forex trading time is divided into several main sessions, namely: Sydney Session (Australia), Tokyo Session (Asia), London Session (Europe), New York Session (America).
As we know, there is quite a long time difference between Australia and America (around 16 hours). This is what makes the forex trading market never sleeps. When a market in one country closes, another market is open, and so on.
This is what makes the forex trading market never sleeps. When a market in one country closes, another market is open, and so on.
For more details, let’s look at the forex market opening and closing hours by region.
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The forex trading hours guide can be used as a reference, except when the United States and several other countries apply Daylight Saving Time (DST).
During DST, forex trading hours can be shifted forward by 1 hour, as can the schedule of important events in the economic calendar.
DST is enforced between March-November with different dates each year, so forex brokers usually make announcements when DST will start and end.
As an additional reference, you can also take a look at the picture of the forex market opening hours according to West Indonesia Time (Jakarta, GMT+7), as follows:
It can be seen from the picture above that the opening and closing hours of the forex market are interconnected, there are even two overlaps, namely between 19:00 to 22:00 (European and American markets) and 6:00 to 22:00. 12:00 (Australian and Asian Market).
Naturally, when there is an overlap, the volume of automatic trading transactions is greater and price movements become more dynamic, especially when the European and American markets overlap.
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Asian Session
Trading on the Asian market accounts for 20% of the total world forex trading, covering the Tokyo session and the Sydney session,
Transaction centers are located in Tokyo (8%), Singapore (5%), Hong Kong (4%), and Australia (3%). Some of the characteristics (characteristics) of the Asian market are:
- Apart from Japan, other countries with considerable economic power (Hong Kong, Singapore, Australia, Korea) are also actively conducting transactions. China and Japan are the main exporting countries, so apart from the Central Banks of the countries that are active during these working hours, commercial entrepreneurs (exports/imports) are also actively trading currencies.
- At certain times, market liquidity (availability of liquid funds) can run low. This is seen in very small price movements and lasts for a relatively long time, so that a consolidation phase appears in the price movements of a currency pair.
- Most price movements occur early in the session, when a lot of fundamental economic news is released or announced.
- The Tokyo market will more or less have an impact on the next forex trading session, because traders in Europe and America will see what happened earlier in the Tokyo market, before making trading decisions that day.
- Currencies that may be interesting for you to trade in this Asian session are JPY and AUD. In this case, please note that the news that has an impact is not only issued by Japan and Australia. Given that China has grown into a new economic power, when they release important news, the movement of the two currencies will also be affected.
European Session
Europe, especially London, has been the world’s financial center since the Industrial Revolution.
The European market takes the largest portion, which is about 36% of the total trade in the global forex market. About 31% of trade is done in London, while the remaining 5% is in Germany.
Correspondingly, the European market is the busiest time and hours of forex trading, when thousands of world-class big businessmen make transactions between each other. Some of the characteristics (characteristics) of the European market are:
- The London session is a time when forex trading is very busy. This results in very high liquidity and smaller spreads.
- The range (range) of price movements becomes very high (volatile).
- Often, the trend that occurs in the European session will continue until the beginning of the New York session.
- During the day European time, volatility will decrease as the lunch break and wait for the American session to open.
- Some important news in the Eurozone can greatly influence price movements.
- During the European session, all currency pairs become very attractive to trade due to the hectic forex market. However, the most profitable movements in the major pairs are EUR/USD, GBP/USD, USD/JPY, and USD/CHF. Several cross pairs such as EUR/JPY and GBP/JPY can also be seen because the movement is quite large.
American Session
New York is the center of commerce and business in America. The city is also nicknamed “City that Never Sleeps”, meaning the city that never sleeps. However, today’s New York is not only the financial center of America, but the financial center of the world.
Therefore, it is not surprising that the American session centered in New York alone can account for around 19% of total global forex trading.
In addition, it is worth remembering that the US Dollar is currently considered the world’s currency. Around 90% of global trade in goods and services uses the US Dollar as a medium of payment, so this American trading session is also an important moment for forex traders.
Some of the features (characteristics) of the New York market are:
- Market liquidity tends to be high during the morning of New York time (early trading), due to the overlap with the European session.
- When important US economic news is released, it will have enormous power to move prices in the market. Remember, 90% of trades involve Dollars.
- After the European market closed, liquidity and volatility also tended to decrease, coinciding with the afternoon trading session in America.
- On Friday afternoon New York time, the trading crowd will drop dramatically, as Asian and European traders have stopped to work, preparing for the holiday weekend.
- Trend reversal events may often occur in the time period after the American afternoon session, so traders need to be careful. Some traders don’t want to leave positions open at the end of Friday’s trading to avoid things or news that might happen over the weekend.
- As in the European market, all currency pairs are very attractive to trade in the American session. However, you should pay more attention to the times when important news will and is being released. The US dollar can move wildly and even jump around.
Also read: Top 4 Forex Trading Risks You Must Understand, Don’t Lose!
Measuring Low or Busy Forex Trading Time
Crowded or quiet the forex market at a certain time is usually measured by the deviation of the difference in price movements of each currency pair.
This deviation is calculated in pips, which marks the smallest unit of price movement in forex.
Next, let’s see how the price movements (in pips) compare for the most popular currency pairs, in each forex trading session.
It is clear that the price movements in the European and American sessions were larger than in the Asian session.
The volume of trade in a currency is related to the concentration of transactions in their region, but this only applies to certain countries in Europe, America, and Asia.
Other regions of the world account for only 25% of global forex trading, and working hours have no effect on forex trading time.
Let’s continue a little review of the characteristics of price movements in currency pairs every day, so that you get a complete picture and can determine when, hours, times and days are the most suitable for trading.
Pay attention to the comparison table of price movements per day (in pips).
From the table, it can be seen that Wednesday, Thursday, and Friday are the busiest forex trading days. In other words, it is the forex trading time that provides the most trading opportunities.
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Best Forex Trading Time for Traders to Get High Profit
Based on the description above, it can be concluded that the best times and hours for forex trading are:
- The European session is the busiest and busiest time of forex trading.
- The overlap of the two sessions creates forex trading hours with increased market volatility and liquidity. This presents an opportunity for you to immediately make a profit in no time.
- Forex trading is most crowded in the middle of the week (Wednesday, Thursday, Friday).
We can also find out which times and hours are not suitable for forex trading for some traders, namely:
- For the aggressive type of trader, the Asian session becomes less exciting because of its low volatility and liquidity. Price movements tend to be slow in this trading session.
- On Saturday mornings when the market is about to close (after the afternoon session of the American market), some traders have already stopped trading, so the market will usually be very quiet.
Also read: 6 Reasons and Advantages of Forex Trading that You Must Know
In addition to the points mentioned above, it should also be noted that usually when there is an important world event such as the Football World Cup, the market can become quiet because traders’ attention shifts.
Then, in determining the forex trading hours that will be undertaken, also pay attention to your rest time.
Consider this so that you do not transact when you are physically tired or not in prime condition, because it will affect decision making later.
Well, now that you know the most profitable forex trading times and hours, the next step in learning forex trading is to understand the basics of technical analysis and fundamental analysis.
Also read: The 6 Type Forex Market Participants In The World
Technical analysis is the study of price movements from a mathematical point of view, while fundamental analysis assesses the market through economic, social, and political conditions that affect supply and demand. Both can be your main support in achieving forex trading success.
If you do not understand the specific terms in forex on this page such as liquidity, spreads, and pips, you can visit Forex Dictionary. Take advantage of Forex Dictionary when you encounter new vocabulary for optimal understanding.
