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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

What Is the Best Time for Trading Forex?

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The foreign exchange market is a global decentralised market, which means that it is open 24 hours a day in different parts of the world. Most traders agree that the best times to trade the forex market are when the market is most active, which is often when the trading hours of major regions overlap. In this article, we share what the four major forex centres in the world are, their opening times and the best time to trade forex in the UK.

The 4 Major Forex Markets

Within the global market, the four major forex exchange markets are in London, New York, Sydney and Tokyo.

London Market Hours: 8:00 am - 4:30 pm (GMT)

The London Stock Exchange is open from Monday through Friday between the hours of 8 am to noon and from 12:02 to 4:30 pm GMT. Moreover, the LSE also offers extended trading hours, from 5:05 to 7:50 am and from 4:40 to 5:15 pm GMT.

New York Market Hours: 2:30 pm - 9:30 pm (GMT)

The New York Stock Exchange is open Monday through Friday from 9:30 am to 4:00 pm Eastern Daylight Time, which is from 2:30 pm to 9:30 pm GMT. The New York Stock Exchange does not close for lunch and is open for a total of 6 hours 30 minutes per day.

The New York Stock Exchange also offers extended hours trading. The Pre-Trading Session is from 9:00 am to 2:30 pm and the Post-Trading Session is from 9:00 pm to 1:00 am GMT.

Sydney Market Hours - 11:15 pm - 5:15 am (GMT)

The Sydney Stock Exchange is available Monday through Friday between 10:15 am and 4:15 pm, Australian Eastern Daylight Time (GMT+11), which is from 11:15 pm to 5:15 am GMT. Unlike the Tokyo Stock Exchange, the Sydney Stock Exchange doesn’t close for lunch. It also doesn’t offer pre-market trading or after-hours trading opportunities. 

Tokyo Market Hours: 12:00 am - 6 am (GMT) with 1 hour lunch break

The Tokyo Stock Exchange is open Monday through Friday from 9:00 to 11:30 am and then from 12:30 to 3:00 pm Japan Standard Time (GMT+9), which is from 12:00 to 2:30 am and from 3:30 to 6 am London Time (GMT).

Best Time of Day to Trade Forex

As you may have already noticed, there are several times of the day when more than one market is open at the same time. Most traders agree that these overlaps provide the greatest degree of liquidity in certain currency pairs, as well as wider pip range movement. This makes, at least in theory, these periods the best times to trade.

When trading is heavier in particular currency pairs, it can give a trader the edge needed to make a profit. This is especially true for short-term traders who use strategies such as scalping or day trading. However, it’s important to bear in mind that greater volatility also presents higher risks of losing money.

The London - New York Overlap (2:30 pm - 4:30 pm GMT)

The European - US overlap is often considered to be one of the best times for trading forex. Trading in all the European currencies is heaviest during this period and offers the most liquidity for currency pairs involving the euro, pound sterling and Swiss franc.

For example, if you are trading the EUR/USD, GBP/USD or USD/CHF currency pairs, then the market for these currency pairs would probably be the most active during this period, because they represent the major currency pairs involving the United States and European countries.

The Sydney - Tokyo Overlap (12:00 am - 5:15 am GMT)

This is the period during which the New Zealand and Australian markets overlap with the Asian markets of Tokyo, Singapore and Hong Kong. This time period tends to have the most liquidity for the Australian and New Zealand dollars and their crosses.

This overlapping time frame often sees especially active trading in the AUD/USD, AUD/JPY, EUR/AUD, NZD/USD, AUD/NZD and NZD/JPY currency pairs.

Trading Forex During the London Session in the UK

Popular forex pairs to trade during the London session are the majors such as the GBP/USD cross or the EUR/GBP cross. This is especially true during the overlap between the London and New York markets, as well as the European (Frankfurt) session which is open during almost identical hours to the London session.

Trading Forex During the New York Session from the UK

The New York session has the biggest overlap with the London session, and so it is a good time to trade forex in the UK, especially the GBP/USD cross. The New York session is the last trading window to close on the 24-hour forex trading clock, and it often experiences high trading volume as a result as traders seek to squeeze the last bit of profit out of that trading session’s news announcements and events which affect the price of currencies.

Trading Forex During the Tokyo Session from the UK

The Tokyo session is probably the least liquid of the major sessions to trade forex from the UK because of the time difference and the limited overlap.

Active pairs to trade during the Tokyo session are any JPY cross, such as USD/JPY or EUR/JPY. There is also a lot of liquidity and volatility in the AUD/JPY currency pair during the overlap between the Sydney and Tokyo session, which is one of the most volatile currency pairs on the market and the second most traded JPY cross behind USD/JPY.

Key Takeaways

  • The forex market runs on the normal business hours of four different parts of the world and their respective time zones.
  • The US/London markets overlap has the heaviest volume of trading and presents some of the best trading opportunities.
  • The Sydney/Tokyo markets overlap is not as volatile as the US/London overlap, but it still offers opportunities.

FAQ

Typically, the UK forex market is most active just after the opening of the London session at 8:00 am (UK time). At this time, liquidity and volatility will likely be high as traders begin interacting with each other.

All in all, Tuesday, Wednesday and Thursday are the best days for Forex trading due to higher volatility. During the middle of the week, the currency market sees the most trading action. As for the rest of the week, Mondays are static, and Fridays can be unpredictable. You can learn more about what are the best trading days for forex here.

The London forex market opening hours start at 8:00 am UK time and account for roughly 35% of all forex transactions. Due to the large volume of trading during the London session, there are likely to be lower forex spreads as liquidity is higher.

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