When The Forex Market Hours

The spot forex market is unique to any other market in the world, as trading is available 24-hours a day. Somewhere around the world, a financial center is open for business, where banks and other institutions exchange currencies, every hour of the day and night with generally only minor gaps on the weekend. Essentially foreign exchange markets follow the sun around the world, giving traders the flexibility of determining their trading day.

Yes, it is true that the forex is open 24 hours a day, but that doesn’t mean it’s always active the whole day. You can make money in the forex when the market moves up, and you can even make money when the market moves down. However, you will have a very difficult time trying to make money when the market doesn’t move at all. This lesson will help determine when the best times of the day are to trade.

When you choose to trade currencies, you’re choosing greater freedom in your trading. With the ability to trade forex 24 hours a day, 5.5 days a week with extreme liquidity, you participate when you want to, not when the market dictates.

The market is able to stay open 24 hours a day, 5.5 days a week, because trading begins with the open in Australia, and flows through the open and close of the major financial trading centers in Asia, Europe, the United States and back again to Australia.

The daily foreign currency trading volume is determined by which markets are open at any point in time. When international market open times overlap, such as when the U.S. and British market are open simultaneously, greater trading volume is seen, resulting in peak trading.

Forex Open Market Time (* time displayed as EST):

So far, all the lessons we have taught you deal with "how" to trade the forex market. But another important lesson that you need to learn is "when" to trade the forex market.

How do the Forex markets operate on a 24 hour basis

A true 24-hour market, Forex trading begins each day in Sydney, and moves around the globe as the business day begins in each financial center, first to Tokyo, London (and Europe), and New York. Unlike any other financial market, investors can respond to currency fluctuations caused by economic, social and political events at the time they occur - day or night.

Active trading sessions in each country’s financial centers around the world take place from Sunday 5:00PM EST to Friday 5:00PM EST. The daily session for daily charting purposes “ends” at 5:00PM EST (coincident with the New York “close”), but the market does not actually close. Here are the time intervals for each of the major financial centers expressed as EST.

• Sydney session starts at 5:00 pm and ends around 2:00 am.
• Tokyo session begins at 7:00 pm and ends around 4:00 am.
• London opens at 3:00 am and ends around 12:00 am.
• New York session opens at 8:00 am and ends around 5:00 pm.

To give you a visual representation of this, here’s a figure showing the same business hours for the various regions. In this figure you can see the overlap between the London (and Europe) session and the New York session, between 8 am and 11 am EST. The currency markets experience the highest volatility and volume during that overlap, which also coincides with the releases of important US economic releases.

Forex Markets Timeline

The Forex market is considered an Over The Counter (OTC) or 'interbank' market, due to the fact that transactions are conducted between two counterparts over the telephone or via an electronic network. Trading is not centralized on an exchange, as with the stock and futures markets.