The extended hours that forex markets are open are often cited as one of the attractive draws of the forex markets. One of the benefits of trading forex is that the forex markets trade all day every day during the week. Trading kicks off as Sydney opens for business on Monday and then continues until New York closes on Friday.
This, unlike stock markets is much less restrictive, enabling you to have more chances of finding a time to trade which suits you, rather than the stock markets which close after a certain time.
As one major forex market closes another one opens, and the trading hours move around the world. The timetable looks something like this:
01:00pm – 10:00 pm GMT – New York Session
10:00pm Sydney starts trading.
00:00am – 09:00am – Tokyo session
08:00am – 05 :00pm – London
The fact that the forex markets are open 24 hours a day means there are plenty of trading opportunities to be had. However, it is still important to know and understand when the most active trading hours are. Generally, speak, less active trading periods mean fewer trading opportunities present themselves and in the more active sessions you could expect more trading opportunities to appear.
So a less active period would be between the New York session closing and the Tokyo session starting. Whilst Sydney is open, the volume tends to be lighter and activity more modest than the 3 major session which are London, New York and Tokyo.
A more active period would be between 01:00 pm to 05:00 pm when both the US and Europe are open for business. Trading pairs such as the EUR/USD, GBP/USD and USD/CHF in this period, you could find there are increased opportunities.
The other point that it is worth watching out for is the time that economic data are released. The exact times and days of such releases you can find on the economic calendar that Vantage FX provides its clients with. The timetable will also show you the dates and times of the central bank meetings of major countries. Around these periods you will find bigger movements in the forex markets and increased opportunities.
Generally speaking US economic data is released around 13:30 GMT, whilst European data tends to be released around 07:00 am GMT whilst London releases are generally at 09:30 am.
For day traders the most active time for trading is when London opens, until the close in New York. So this would be from 08:00 am GMT to 22:00 GMT.
In the London session, 08:00 am – 05:00pm GMT The most actively traded currencies are EUR, GBP and USD.
US Session 1:00pm – 10pm GMT The most actively traded currencies are USD, EUR, GBP, AUD, JPY
Asian session 10:00pm GMT Sunday evening – 09:00amGMT – this period is possibly the less suitable for day traders as fluctuations are generally smaller.