Forex Trading Hours and Market Sessions
Forex is a decentralized market that operates through financial centers around the world. Since these financial centers are located in different time zones, traders can enjoy a seamless 24-hour trading environment through retail brokerage firms, like FXDD. Trading begins every Sunday during the Asian session at 5:00 PM ET and ends on Friday at 4:55 PM ET.
The eight largest financial centers in the world are the United Kingdom, United States, Japan, Singapore, Switzerland, Hong Kong, Australia, and France. While there are other financial centers scattered across the globe, the trading times of these centers are lumped into three sessions known at the Asian, European, and North American sessions.
After the weekend, liquidity returns to Forex during the Asian session. The market is operating through financial centers in Japan, China, Australia, New Zealand, and Russia at this time, among others. The most traded currencies during this time is the Japanese yen. The most volatile pairs during this session include the GBP/JPY, GBP/CHF, USD/JPY, and AUD/JPY. Fundamental forces play into these pairs’ volatility, with major new releases coming from Japan, Australia, New Zealand, and China.
This session operates through a number of major financial centers, including Paris, Frankfurt, Zurich, and London. London is the largest financial center in the world, trading nearly 30% of all Forex transactions. With such a heavy trade volume, the European Session experiences some of the largest moves in the market. The most active currencies in this session are the GBP, EUR, and CHF. The GBP/CHF continues to be a volatile pair throughout the European Session, competing with GBP/JPY, and USD/CHF.
North American Session
The North American Session is dominated by U.S. transactions, with contributive trades coming from Canada, Mexico, and South America. Volatility hits its peak in New York City, where fundamental factors drive the USD and CAD. Since nearly 85% of all Forex trades involve the USD, this session has been known to generate tremendous moves in the market.
The United States dollar is the most commonly traded currency in the Forex market, accounting for most of the liquidity and can be the most volatile. Discovering the differences in price movements among the most traded currencies can help traders take advantage of swings in the market based on news, economic indicators and technical analysis. You can learn the basics of technical analysis versus fundamental analysis or find out more about which economic variables impact Forex markets here. You can keep time zones in mind when actively trading to take full advantage of the best changes in buying and selling sentiment for currency pairs you’re actively following. As always, risk is a possibility in the Forex market.
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HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.
ADVISORY WARNING: FXDD provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect’s individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and FXDD specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FXDD expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.