The global forex market is open 24-hours a day, 5.5 days a week.
However, the key to successful forex trading lies in trading during periods of high market activity, where there are significant volumes of trades.
This way you’re less likely to experience slippage, and spreads will be lower.
Here we’re going to take a deep dive into forex trading hours world wide, and then explain the best hours to trade the New York forex trading session.
World-wide forex trading hours
Forex trading around the world operates in four major financial sessions:
- the Sydney session
- the Tokyo session (also known as the Asian session)
- 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 one of the major financial trading centres.
Unlike share trading, which is strictly governed by the opening and closing times of major stock markets, forex trading does not have a regulated central market.
Therefore, there’s no opening or closing bell that signals the formal start of a trading session.
Forex session hours are generally based on when trading volumes start to increase, which results from high-volume professional forex traders coming online and starting their working day.
This surge in activity coincides with daylight hours and the standard working day in the various time zones across the world.
The trading day starts in New Zealand on Monday morning at 8.00am local time, and finishes when the New York session winds down.
The international dateline is the official start of a new calendar day.
It’s important to check with your trading charts for opening and closing session times relevant to your part of the world.
The New York forex session
The New York forex trading session is the most pivotal period in the global forex market, thanks to the very high trading volume centred around the United States.
The New York (or US) session is characterised by high liquidity and market volatility, especially during the overlap with the London session.
Opening Times in US Hours:
- Opening Time: 8.00am EST
- Closing Time: 5.00pm EST
Market Size
The New York session accounts for approximately 17% of the total daily forex trading volume.
Given the global daily forex trading volume of around $7.5 trillion, this equates to roughly $1.1 trillion traded during the New York or ‘North American’ session.
USD Dominance
The US dollar’s dominance in the forex market means that the New York session is particularly important for trading USD currency pairs.
The dollar’s role as the world’s primary reserve currency adds to this session’s significance.
Overlap with London session
The overlap period between the New York and London sessions is the most liquid and active time in the forex market.
This overlap accounts for around 50% of the daily forex trading volume.
During the overlap, periods of extreme volatility and direction change can be seen, particularly when the US market opens first thing in the morning.
The chart below shows the price of GBP/USD suddenly change direction on the opening of the US forex session.
Key characteristics of the New York forex session
High liquidity: The New York session boasts high liquidity, particularly during the overlap with the London session from 8.00am to 12.00pm EST.
This period sees the highest trading volumes and activity due to the participation of both European and American traders.
Significant market movements
Major US economic news releases, such as non-farm payroll reports, GDP data, and Federal Reserve announcements, often occur during the New York session.
These events can cause substantial market movements and heightened volatility.
Major currency pairs
Major currency pairs such as
- EUR/USD
- GBP/USD
- USD/JPY
see significant trading activity during the New York session.
The US dollar’s involvement in nearly 90% of all forex transactions highlights the importance of this session for USD pairs.
NY session influence on the global markets
Trading activity in the New York session impacts global market trends.
Movements in the US stock market, bond market, and other financial instruments often influence the forex trading market during this time.
The chart below shows how the trend direction of the EUR/USD suddenly changes direction as the US session opens, highlighting the strong influence that session has on world forex prices.
Financial centre involvement in the NY session
There are other financial centres which contribute to the liquidity of the North American forex session.
In order of volume contribution these are:
Toronto, Canada:
Toronto is a significant financial hub contributing to the North American forex session.
The city’s stock exchange, the Toronto Stock Exchange (TSX), operates from 9.30am to 4.00pm EST, overlapping with the New York session.
Toronto’s financial institutions are key players in the forex market, especially for trading USD/CAD.
Chicago, USA:
Chicago is home to the Chicago Mercantile Exchange (CME), one of the largest futures and options exchanges in the world.
The CME’s trading hours span from 8.30am to 3.15pm CST (9.30am to 4.15pm EST), contributing to forex market activity during the New York session.
Boston, USA:
As a prominent financial centre, Boston hosts numerous asset management firms and financial institutions.
The trading activities in Boston align with the New York session, providing additional liquidity and market depth.
Washington D.C., USA
While not a traditional trading hub, Washington D.C. plays a crucial role in the NY session due to its influence on economic policy and regulation.
News and announcements from government and regulatory bodies in Washington can significantly impact the forex market during the New York session.
Trading strategies for the New York forex session
News trading: Focus on economic news releases and reports during the New York session. These events can cause sharp price movements, presenting opportunities for news-based trading strategies. Be aware of the economic calendar and prepare for potential volatility around key announcements.
Breakout trading: Breakout trading involves entering trades when the price breaks out of a defined range or key level. The New York session’s volatility can lead to frequent breakouts, providing many opportunities for you to capitalise on these movements.
Trend trading: Given the significant market movements during the New York session, trend trading strategies can be effective. Identify and follow established trends, especially during the overlap with the London session when trading volumes are highest.
Scalping: Scalping involves making numerous small trades to capture minor price movements. The high liquidity and tight spreads of the New York session make it an ideal time for scalping strategies, although I wouldn’t recommend that novice traders start using a scalping strategy until they have more experience.
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:
Daylight savings time (DST)
The open and close times of the forex marlet 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.
Frequently asked questions about forex market hours
What are the global forex market hours?
The forex market operates continuously from Sunday at 10:00pm UTC to Friday at 10:00pm UTC for retail traders.
What are the four primary forex market session hours in New York time?
The four primary sessions in the forex market are:
- Sydney: 5.00pm to 2.00am EST (Eastern Standard Time)
- Tokyo: 7.00pm to 4.00am EST
- London: 3.00am to 12.00pm EST
- New York: 8.00am to 5.00pm 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:
- Tokyo/London overlap: 3.00am to 4.00am EST
- London/New York overlap: 8.00am to 12.00pm EST
- Sydney/Tokyo overlap: 7.00pm to 2.00am EST
These overlaps generally see increased trading activity due to the simultaneous participation of major financial centres.
What are the best pairs to trade for each overlap time?
London/New York overlap:
- EUR/USD
- GBP/USD
- USD/JPY
Tokyo/London overlap:
- EUR/JPY
- GBP/JPY
- AUD/JPY
Sydney/Tokyo overlap:
- 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 times see the highest volume globally?
The London-New York overlap 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 often occurs during session overlaps, with the major one being the London-New York overlap, followed by the Asian/Europe overlap.
Which forex session is best for beginners to trade?
The Sydney session is often recommended for beginners due to its relatively quiet and predictable market movements.
How does daylight saving time affect forex trading hours?
Daylight saving time changes impact forex trading hours by shifting session times relative to UTC.
Traders should adjust their schedules accordingly, and stay informed about seasonal market opening and closing times.
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.
United States: Most states observe DST, with exceptions in Arizona (except for the Navajo Nation) and Hawaii.
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.
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 EST in March/April and again in September/October.
This impacts forex trading hours and scheduling for traders operating across different time zones.
Final thoughts
Forex trading is accessible 24-hours a day, 5.5 days a week, somewhere in the world.
The global time zone overlap ensures that as the US markets wind down, the Australian and Asian markets are starting up, followed by the European markets, creating a continuous trading cycle.
This continuous cycle allows forex traders to trade at times that best suits their personal schedules and other commitments, whether they be work, family, or study.
For beginners, it’s wise to select a trading time that aligns with your lifestyle, and trade consistently during those hours so you become in tune with the rhythm of that session.
Focus on a major forex pair that matches the session you are trading in, and thoroughly understand the unique characteristics of that session.
Avoid trading multiple pairs across different sessions simultaneously.
By concentrating on one pair and one session, you can refine your trading skills before expanding to other pairs or sessions.
Forex trading can fit into almost any schedule, day or night, so I hope you continue to find your trading experience worthwhile and enjoyable.
Until 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
