The wonderful thing about being a Forex Trader is that you get to pick your own hours. The markets are open for 24 hours a day, Monday to Friday, so it doesn't matter where you are, how early you like to wake up or go to sleep, the market will be open and ready to trade.
That being said, there are certain times that are better for trading than others while there are also certain times that you could be better off focusing on particular currencies or pairs.
Let's start by looking at the 4 Major Trading Sessions...
Sydney Open - 22:00 GMT (Summer), 21:00 GMT (Winter)
Sydney Close - 07:00 GMT (Summer), 06:00 GMT (Winter)
Tokyo Open - 23:00 GMT
Tokyo Close - 08:00 GMT
Tokyo session characteristics:
London Open - 07:00 GMT (Summer), 08:00 GMT (Winter)
London Close - 16:00 GMT (Summer), 17:00 GMT (Winter)
London session characteristics:
New York Open - 12:00 GMT (Summer), 13:00 GMT (Winter)
New York Close - 21:00 GMT (Summer), 22:00 GMT (Winter)
New York session characteristics:
You can see that in between each forex trading session, there is a period of time where two sessions are open at the same time.
Example: During the summer, London closes at 16:00 GMT while New York opens at 12:00 GMT. This means there is a 4 hour period where both of these sessions are open.
These are usually the busiest times during the trading day where you would expect to see more movement, and we like movement... movement is where the money is made!
The overlap between Tokyo and London isn't always the most liquid however as in summer there is only a 1-hour crossover while during the winter there is no crossover.
Tokyo does have a longer overlap with other European sessions such as Frankfurt, but there still isn't an awful lot of movement.
The London/New York overlap is where the main action happens.
It is during this period where we can see some big moves, especially when news is released from the U.S. and Canda, while there can also be late news coming out of Europe.
Check out this infographic which shows the average pip movement for certain pairs during the Tokyo, London and New York sessions.
As you can see, the London session usually provides the most movement with GBP/JPY showing the most with an average pip movement of 151 pips during that London session.
With the markets open 24 hours a day, any time is a good time to trade, but there are times that are still better than others.
During the Sydney and Tokyo sessions, you would expect to see more movement from AUD, NZD, and JPY pairs so it is worth keeping an eye on these.
As we enter the London session the European currencies such as the EUR and GBP will show more movement. Crosses with the JPY can be good while also the USD pairs will be showing more movement.
Finally during the US session it basically a free for all. Most pairs are tradable during this session but again, it is recommended that you stick to the majors and the minors.
What's your favorite time of the day to trade?
Is it because it suits your schedule or because you like the market activity at that time?
Let me know in the comment section below!
With Pip Love,
Garry at Urban Forex
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