The forex market operates 24-hours a day, five days a week.
However, this doesn’t mean that all hours are equally suitable for trading.
The key to successful forex trading lies in trading during periods of high market activity, where there are significant volumes of trades.
Here we will take a look first at global trading hours, and then at the Asian forex trading session, and explain the best times to trade forex.
Global forex trading hours
Forex trading is divided into four major sessions:
- the Sydney session (also known as the Australian session, which includes New Zealand)
- the Tokyo session (also known as the Asian session, including Singapore, Japan and China)
- the London session (also known as the European session)
- the New York session (also known as the US session)
Each of these sessions corresponds to the business hours of major financial centres worldwide.
Asian session trading times
Trading hours
Due to daylight saving, forex trading hours are frequently quoted in UTC or Coordinated Universal Time, which does not change with daylight savings.
The Tokyo session opens at 9.00am Japan Standard Time (JST) and closes at 6.00pm JST.
Here’s a breakdown of opening and closing times in local time for other Asian traders wishing to trade the Tokyo forex session.
China (Shanghai)
- Local time: China Standard Time (CST)
- Opening time: 9.00am CST (same as Tokyo)
- Closing time: 5.00pm CST (1 hour before Tokyo)
Hong Kong
- Local time: Hong Kong Time (HKT)
- Opening time: 9.00am HKT (same as Tokyo)
- Closing time: 5.00pm HKT (1 hour before Tokyo)
Indonesia (Jakarta)
- Local time: Western Indonesia Time (WIB)
- Opening time: 8.00am WIB (2 hours before Tokyo)
- Closing time: 4.00pm WIB (3 hours before Tokyo)
Malaysia (Kuala Lumpur)
- Local time: Malaysia Time (MYT)
- Opening time: 9.00am MYT (same as Tokyo)
- Closing time: 5.00pm MYT (1 hour before Tokyo)
Singapore (Singapore)
- Local time: Singapore Time (SGT)
- Opening time: 9.00am SGT (same as Tokyo)
- Closing time: 5.00pm SGT (1 hour before Tokyo)
South Korea (Seoul)
- Local time: Korea Standard Time (KST)
- Opening time: 9.00am KST (same as Tokyo)
- Closing time: 6.00pm KST (same as Tokyo)
Asian trading session times in other areas of the world
Characteristics of the Asian forex session
The Asian session experiences moderate liquidity and volatility. While it is not as liquid as the London or New York sessions, it still sees substantial trading volumes, particularly in yen pairs.
Market sentiment and trends
The Asian session often sets the early market trends and sentiment for the day.
Movements during this session can influence trading strategies and market direction for the London and New York sessions.
Heightened volatility periods
The Asian session experiences heightened volatility during the following times:
- Opening hours: Volatility often increases as the market reacts to economic data releases from Japan and other Asian countries. The opening hours can set the tone for the rest of the session.
- Overlap with the Sydney session: This overlap increases liquidity and volatility, particularly in currency pairs involving the Japanese yen (JPY), Australian dollar (AUD), and New Zealand dollar (NZD).
This chart shows how increased volatility can be seen as the Tokyo session begins and Asian traders start their working day.
Economic data releases
Economic data from Japan and China heavily influences the Asian session.
Key indicators such as the Bank of Japan’s (BoJ) monetary policy statements, GDP figures, inflation rates, and employment data can cause significant market movements.
Key events to watch out for include:
Monetary Authority of Singapore (MAS) policy: Announcements and reports from MAS on Singapore’s monetary policy can directly impact the SGD.
Singapore GDP growth rate: Quarterly GDP reports provide insights into Singapore’s economic health and can also impact the SGD.
China’s economic data: Given Singapore’s close economic ties with China, data such as GDP, PMI, and trade balance figures from China can influence the SGD.
Traders closely monitor these releases to anticipate market direction.
Geopolitical events:
Political events and developments in Southeast Asia can significantly impact the Singapore session.
News related to regional politics, trade agreements, and geopolitical tensions can lead to increased volatility.
These can include:
US-China trade relations: Developments in the trade relationship between the US and China can create significant volatility in the forex market, affecting the SGD.
Regional Comprehensive Economic Partnership (RCEP): Changes or updates to this trade agreement, which includes Singapore, can impact regional currencies, including the SGD.
Trading strategies for the Asian session
During the Tokyo session, traders often employ strategies that capitalise on yen pair movements and regional economic data releases.
Scalping, day trading, and news trading are common approaches, as traders seek to benefit from the session’s moderate volatility.
Major currency pairs traded
During the Tokyo session, currency pairs involving the Japanese yen (JPY) are highly active.
Popular pairs include:
- USD/JPY
- EUR/JPY
- GBP/JPY.
Movements in these pairs can be influenced by economic data releases and market events from Japan.
Daylight savings time (DST)
The open and close times of the forex sessions changes in some countries twice a year due to daylight savings.
These changes occur during October/November and again during March/April.
Countries that do have daylight savings include the US, the UK, Australia and New Zealand.
It’s important for forex traders to be aware of daylight saving time changes and to adjust their trading hours accordingly.
International Market Hours Calculator
If you want to check the exact market opening hours for the region where you live, you can use this handy market hours calculator:
Frequently asked questions about forex market hours
What are the global forex market hours?
The forex market operates continuously from Sunday night at 9.00pm UTC to Friday night at 10.00pm UTC for retail traders.
What are the four forex market session hours in local time?
The four primary sessions in the forex market are:
Sydney
Open: 6.30am Monday morning (AEST)
Close: 6.30am Saturday morning (AEST)
London
Open: 9.00pm Sunday night (GMT)
Close: 9.00pm Friday night (GMT)
Tokyo
Open: 6.00am Monday morning (JST)
Close: 6.00am Saturday morning (JST)
New York
Open: 4.00pm Sunday afternoon (EST)
Close: 4.00pm Friday afternoon (EST)
What are the highest-volume session overlap times?
The highest volume session overlap times in the forex market typically occur during the following times:
- London/New York overlap: 1.00pm to 5.00pm UTC
- Tokyo/London overlap: 8.00am to 9.00am UTC
- Sydney/Tokyo overlap: 11.00pm to 6.00am UTC
These overlaps generally see increased trading activity due to the simultaneous participation of more than one major financial centre.
What are the best pairs to trade for each overlap time?
London/New York overlap (1.00pm to 5.00pm UTC):
- EUR/USD
- GBP/USD
- USD/JPY
Tokyo/London overlap (8.00am to 9.00am UTC):
- EUR/JPY
- GBP/JPY
- AUD/JPY
Sydney/Tokyo overlap (11.00pm to 6.00am UTC):
- AUD/USD
- AUD/NZD
- NZD/JPY
These pairs are popular during the overlap times due to increased liquidity and volatility, offering the best trading opportunities.
Which forex trading time sees the highest volume globally?
The London-New York overlap from 1.00pm to 5.00pm UTC typically experiences the highest trading volume in the forex market.
When is the most volatile time in forex trading?
The most volatile time in forex trading usually occurs during session overlaps, such as the London-New York overlap from 1.00pm to 5.00pm UTC. This is when the most volatility and the tighest spreads can be found.
Which forex session is best for beginners to trade?
The Sydney, Australian session is often recommended for beginners due to its relatively quiet and predictable market movements. Think of it as a shallow baby pool for traders who are just learning to swim.
How does daylight saving time affect forex trading hours?
Daylight saving time changes impact forex trading hours by shifting session times relative to UTC. In the spring clocks are put forward an hour, and in the autumn they go back an hour.
Daylight savings time changes happen in several major trading centres including New Zealand, Australia, London and Canada and the US.
Traders should stay informed about seasonal daylight saving market opening and closing times, and adjust their trading timetable accordingly.
Which countries change their time due to daylight saving time (DST?)
Australia: Observes DST in most states and territories, except Queensland, Western Australia, and the Northern Territory.
Canada: Most provinces and territories observe DST, except for a few regions like Saskatchewan and parts of British Columbia.
European Union: Most countries in the EU observe DST, although there have been discussions about potentially ending the practice.
United Kingdom: Observes DST, moving clocks forward one hour in spring and back one hour in autumn. This means during summer, GMT is the same as UTC, but in winter it is one hour behind UTC.
United States: Most states observe DST, with exceptions in Arizona (except for the Navajo Nation) and Hawaii.
New Zealand: Observes DST, typically from late September to early April.
Mexico: Most parts of Mexico observe DST, although some bordering regions with the United States may have different practices.
These changes affect local time relative to GMT in March/April and again in September/October.
Final thoughts
You can trade forex 24-hours a day, 5.5 days a week. The overlap in world time zones means that as the US markets are closing, the Australian and Asian markets are opening, followed by the European markets, continuing the trading day around the clock.
The market winds up for the weekend on a Friday evening when the New York session closes, and then starts again with the opening of the New Zealand/Australian market on Monday morning (which is Sunday night if you’re in Europe.)
This allows forex traders to fit trading around their personal time restraints and the other work, family or study responsibilities.
The best advice for novice forex traders is:
- pick a time of the day and week that fits in with your lifestyle
- designate this as your trading time
- pick a major forex pair that is relevant to the trading session you are participating in
- intimately get to know the peculiar characteristics of that one trading session
Don’t fall into the trap of trying to trade multiple pairs simultaneously across different forex sessions.
Stick to one pair, and one session, and hone your trading skills before expanding your trading activity.
The best advice I can give you is to learn to walk before you start tying to run!
Day or night, forex trading is possible at almost any time that’s convenient to you. The possibilities are endless!
Till next time, happy trading!
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Sources
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- Investopedia – The Best Times To Trade Forex. https://www.investopedia.com/articles/forex/08/forex-trading-schedule-trading-times.asp
