The Forex Trading Sessions

The Foreign Exchange (Forex) market trades around the clock, but that doesn’t mean trading conditions remain the same the whole time. The market and individual currency pairs can behave differently depending on the time of day. Keep reading to find out about the Forex market hours and the characteristics of the different trading sessions.

The information in this article is provided for educational purposes only and does not constitute financial advice. Consult a financial advisor before making investment decisions.

Forex Market Hours

One of the defining characteristics of the Forex market is the fact that it can be traded at any time of day during the week. Yes, that’s right. The Forex market is open 24 hours a day, five days a week!

The international currency market is not actually dominated by a single market exchange but, instead, entails a global network of exchanges and brokers throughout the world. Consequently, Forex market hours are based on when trading is open in participating countries.

During the week, trading is always open somewhere, with the result being that, after the Forex market opens on Sunday evening, it doesn’t close again until Friday. This means that Forex traders can access the market around the clock!

What Are the 4 Trading Sessions?

Each day, Forex market hours can be broken up into four major trading sessions. The names of these sessions are derived from the major financial hub in the relevant region.

The Forex market is open for trading throughout the week; however, not all times are created equal. There are times when price action is highly volatile, and others when it is very muted.

The Peak Sessions

Although we’ve highlighted four major trading sessions, three of these Forex sessions tend to be the busiest. These peak sessions are the Tokyo, London and New York sessions, which are also known as the Asian, European and North American sessions, respectively. 

The markets are most active when these three financial powerhouses are conducting business. 

Tokyo

Following the weekend, action returns to the Forex market in the form of the Asian trading session. Although not officially, activity from this part of the world is largely generated by the Tokyo markets, which is why the session bears its name.

Nonetheless, there are a lot of other locations with considerable pull that are present during this period - including Australia, China and Singapore. 

Despite the large number of transactions taking place, liquidity can sometimes be low during the Tokyo session, especially when compared to the London and New York sessions.

London

Later in the trading day, as the Asian session is winding down, the European session takes over in keeping the currency market active.

This time zone is very dense and involves many key financial markets. However, it is London which takes the honour of identifying the boundaries of the European session.

Largely due to its favourable time zone - London is not only the centre of Forex trading in Europe, but also the world. The London session overlaps with the two other peak Forex trading sessions (Tokyo and New York), meaning that a large proportion of daily Forex transactions take place during this period of time.

This increased Forex activity can result in high liquidity throughout the session and, potentially, lower spreads.

A further effect of this increased activity is that the London session tends to present the most volatile Forex market hours. Volatility tends to dip in the middle of the session, before picking up again once New York opens.

New York

When the New York session comes online, the Asian markets have already been closed for several hours, but the day is only halfway through for European Forex traders.

The session is mostly influenced by activity in the US, with contributions from Canada, Mexico and a few countries in South America.

The morning hours can mark high periods of liquidity and volatility, which both tend to die down in the afternoon once the Europeans cease trading. 

Forex Session Times

So, now we know what the different trading sessions are and some of their characteristics, what are the Forex session times? In the table below, we’ve highlighted the trading hours of the four main sessions in both local time and GMT.

Daylight Savings Time 

To confuse things ever so slightly, due to the observation of daylight-saving times, the Forex session times vary with the seasons depending on where you are.  

Out of the four major Forex trading sessions which we identified earlier, only Japan keeps things straightforward all year round and does not change their clocks.  

Whilst this doesn’t affect trading hours in terms of local time, it does impact timings when converting to GMT or other time zones. Consequently, make sure to keep this in mind when trading the different sessions. 

Overlaps

As you are likely to have noticed from the Forex market hours of the different trading sessions, there are periods of the day where two sessions are open at the same time.

These overlaps represent the busiest times of day in terms of Forex transactions, simply because there are more market participants in action.

Being aware of the different Forex sessions and their overlaps gives us an idea of what time of day certain currency pairs are most active.

For example, during the London and New York session overlap - which represents the busiest time of day trading wise - you can expect the EURUSD and GBPUSD to be at their most active, typically with higher volatility and liquidity.

This is depicted in the chart of GBPUSD above, in which the overlap between the London and New York sessions on two consecutive days are highlighted between vertical red lines.

The Standard Deviation indicator along the bottom of the screen reflects the level of volatility in the market - which is noticeably higher during the two highlighted overlap periods.

Therefore, understanding the different trading sessions and their overlaps can help you decide which time of day is preferable in terms of your individual trading style.

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