Do you know forex trading sessions? Forex trading, or forex for short, is a global market where currencies are traded. When it comes to forex trading sessions, there are five types of sessions that traders choose from: the New York session (9-5 EST), the London session (2-4 GMT), the Tokyo session (11-3 JST), the Sydney session (6-8 AEST) and the European session. Which one should you choose? Let’s find out!
The forex market is open around the clock on a daily basis, providing traders with 24-hour access to currency pairs. However, this does not mean that every single hour of those twenty-four is equally active for forex trading purposes. The forex day actually breaks down into five separate sessions: Sydney, New York City (NYC), Tokyo, London and the forex market’s most active session:
These forex trading sessions last for approximately three hours each.
The 5 Different Forex Trading Sessions
Each forex trading session is characterized by a different liquidity level in the forex markets as well as varying degrees of volatility or movement in currency prices.
The Sydney Session
The forex day begins early at 12:00 am EST in Sydney, Australia. This forex trading session is relatively quiet and lasts until about 03:00 pm.
Sydney is considered a quiet forex session and provides traders with ample opportunity to place trades either before or after work hours.
Australia Forex pairs are considered good to trade in the Sydney forex session:
- AUD/USD
- NZD/USD
- USD/CAD
Forex trading hours in Sydney forex session:
– Mon – Thur, 12 AM – 03 PM EST
– Friday, 12 AM – 02 PM EST
The European Session
The European session is the most common market since it starts during the early morning hours in Europe and lasts until around 13:00 EST. One of its benefits is that there are usually fewer traders active on this time zone, which can provide you with an advantage over other more crowded markets. This trading time also allows for a longer holiday without missing any trading activity.
Think about the European session when you’re deciding which market to trade. This time zone is ideal for traders who prefer to work during the night, but it might not be your best choice if you plan on taking several breaks in between sessions or if you need a shorter working day that would end before 13:00 EST.
The major pairs are in European Session:
- EURUSD
- EURJPY
- GBPUSD
- GBPJPY
Forex trading hours in European forex session are:
Monday – Friday: 01:00 am to 12:30 pm EST.
Saturday and Sunday: Closed.
The London Session
The forex market continues with the London forex session which is open all night and closes at about 05:00 am GMT, giving forex traders plenty of time to place trades before going to work or ending their day. Trading during this forex session can be a bit more challenging since activity tends to pick up closer toward the close of forex trading.
The major pairs are in London Session:
- EUR/USD
- GBP/USD
- AUD/USD
- NZD/USD
- USDCAD (the major pairs are the same in every session)
The London forex trading sessions can be a great time to trade since prices tend to move vigorously and quickly during this period. Other factors that may make the London session ideal include:
London Forex Trading Hours:
Monday – Friday: 05:00 am – 04:00 pm GMT (21 hours) *The overlap is from 03.30 am to 04.30 am GMT and it’s called “the crossover” or “golden cross”. The European markets open at 08:00 am GMT and the U.S opens at 17:00 pm GMT
The London forex session is one of the three foreign exchange sessions, alongside New York (from 16:00 to 20:00) and Tokyo (21:00-24:00). The overlap between all three sessions happens for about an hour in both directions.
The Asian Session
The Asian session is the most popular, but that doesn’t mean it’s right for everyone. If you’re trading during this time of day, there are some things to keep in mind. First off, if you have a job where your hours don’t match up with those on the other side of the world (i.e., Asia, Australia, etc.).
It can be difficult to manage your trading during this time. Second, the Asian session is when many of the major fundamental announcements are made in Asia—think China’s NBS manufacturing PMI or Japan’s CPI announcement.
Not only does that mean there will likely be a lot of volatility throughout the day, but if you’re trading during the US session, it may be difficult to gauge how markets are reacting.
Finally, there’s usually less liquidity in Asian trading hours than other sessions because of this time zone difference and all that volatility.
The major pairs are in Asian Session:
- GBPUSD
- EURCAD
- GBPCAD
Asian Forex Trading Hours: 22:00 – 07:00 EST
The New York Session
New York City forex trading session is the most active and provides traders with a multitude of opportunities to trade throughout the day. The Tokyo forex market also offers ample opportunity for forex traders since it’s open until 11:00 pm EST, which means that you can potentially get in on some trades before heading to bed.
The New York session is from 22:00 EST to 05:00 am EST. The trading hours overlap with the London Session and represent a second chance for forex traders in Europe. They can use this opportunity to get into trades before or after their European market opens at 08:00 GMT, which means that they have enough time during the day to explore the New York market.
The major pairs are in the New York Session:
- Euro to US Dollar (EUR/USD)
- US Dollar to Japanese Yen (USD/JPY)
- British Pound to US Dollar (GBP/USD)
- Gold to US Dollar XAUUSD
The forex trading volume in the New York session is 60% higher than in the London Session. This means that you have a greater chance of finding trade opportunities and better prices during the New York Session.
Which session is right for you and why?
Before you can begin to decide which session is right for your trading style, it’s important to understand what makes up each one. Let’s break down the major characteristics of the sessions and how they work together:
European session:
The European trading session is the most popular one in Europe and it’s when you’ll find a large majority of traders active. It lasts from around 12 p.m. GMT to about 11:30 pm every day except Sunday where the last trades are made at about 11 p.m., lasting until Monday morning at around midnight, when everyone starts over again .
This gives us a total of 16 hours per day that this session will be running for five days out of seven! The reason why people trade during these hours is simply that there’s high liquidity due to all the activity happening on markets such as FX Spot and CFDs (Contracts for Differences). There might not be much volatility but there’s definitely a lot of activity.
European Session Characteristics
-It’s when you’ll find the most traders active, in general
-There is high liquidity due to all the trading activities happening on markets such as FX Spot and CFDs (Contracts for Differences)
-Less volatility but lots of action!
US session:
The US trading session takes place from around 12 a.m. GMT to about 11:30 pm every day except Saturday and Sunday where the last trades are made at about midnight, lasting until Monday morning when everyone starts all over again. This gives us a total 16 hours per trading day that this session will be running for six days out of seven! The reason why people trade during these hours is simply that there’s high liquidity due to all the activity happening on markets such as FX Spot and CFDs (Contracts for Differences). We may not have much volatility but we definitely have lots of action going on in our marketplaces!
- This one happens at night–specifically between 12 am – 11:30 pm GMT
- This session is similar to the European one because there’s high liquidity due to all of the activity on markets such as FX Spot and CFDs (Contracts for Differences) happening during these hours. We also have less volatility but lots of action!
Asian Session
The Asian trading session takes place from around 00 am – 11 p.m. every day except Saturday where it ends at about midnight, lasting until Sunday morning when everyone starts all over again. This gives us a total of 16 hours per trading day that this session will be running for five days out of seven!
The reason why people trade during these hours is simply that there’s low liquidity which means we don’t have much activity happening on our markets. Don’t get me wrong, there is definitely some action but it tends to be less pronounced than during the other sessions.
- This session happens in the morning–specifically between 12 am – 11 p.m. GMT
- There isn’t much liquidity so don’t expect a lot of trading action! There’s still movement though…
- The Asian Session Characteristics: this one has low liquidity and not as much trading action compared with European or US ones (but that doesn’t mean they’re completely dead!)
Australian Session
The Australian trading session is very similar to the Asian one except it takes place between around 11 am – 12 a.m. every day, lasting until midnight when everyone starts all over again. This gives us a total of 16 hours per trading day that this session will be running for five days out of seven! The reason why people trade during these hours is simply that there’s low liquidity which means we don’t have much activity happening on our markets. Don’t get me wrong, there is definitely still active but it tends to be less pronounced than during other sessions.
- This one happens in the morning–specifically between 11 am – 12 am GMT
- There is also low liquidity and not as much trading action compared with European or US ones (but that doesn’t mean they’re completely dead!)
- The Australian session: this one has low liquidity and less activity than other sessions. There’s still movement though…
London Session
The London trading session takes place from around 07 am – 08 pm every day except Saturday where it ends at about midnight, lasting until Sunday morning when everyone starts all over again. This gives us a total 16 hours per trading day that this session will be running for five days out of seven!
The reason why people trade during these hours is simply that there’s high liquidity due to the fact most of our key marketplaces are open simultaneously, which means we have tons of activity happening on our markets. It is definitely the most active trading session of all.
- This one happens in the morning–specifically between 07 am – 08 pm GMT
- There’s high liquidity and tons of action! (it’s also when everyone else is trading!)
- The London Session Characteristics: this one has high liquidity because it includes all of the major marketplaces which means TONS OF ACTION! This is by far, THE most active trading session out there.
What is Daylight Savings Time in Forex
Daylight Savings Time (DST) is a system of rules that adjusts the clock by one hour during the summer months. In Forex, DST is used as another way to break down different trading sessions.
