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The Different Trading Sessions

trading sessions intro imageForex trading sessions refer to the open times to buy and sell or trade in the global Forex market. Though the market may be open 24 hours a day, different times of the day are not similarly active; some are characterized by high volatility while others low volatility. For this reason, understanding trading sessions is important so as to determine the best times of the day to trade.

The Forex market is open 24 hours for five days (Monday to Friday) as various players around the globe such as; banks, commercial companies, investment banks, brokers, hedge funds, central banks and investors are operational. Hence, Forex trading sessions are based on the open and close of these market participants. The trading sessions are named after and take the time zones of the financial hubs where these market participants are located.

The major Forex trading sessions are;

  • New York Trading Session; 8am - 5pm EST (EDT)
  • Tokyo Trading Session; 7pm - 4am EST (EDT)
  • Sydney Trading Session (often included in the Tokyo Session); 5pm - 2am EST (EDT)
  • London Trading Session; 3am - 12 noon EST (EDT)

There are times during the day where two trading sessions overlap which are;

  • New York and London Session Overlap; 8am - 12 noon EST (EDT)
  • Sydney and Tokyo Session Overlap; 7pm - 2am EST (EDT)
  • London and Tokyo Session Overlap; 3am - 4am EST (EDT)

Other minor financial trading hubs include; Wellington/Auckland, Sydney, Frankfurt, Hong Kong and Singapore.

MarketHoursTable TimeZones

The Tokyo Trading Session;

Tokyo is the financial trading hub of Asia hence this session is also known as the Asian trading session. The Tokyo trading session opens at 8 am EST (EDT) and accounts for about 21% of total global Forex transactions. It is also the first trading session to experience the thrill of the global Forex market at the beginning of every week.


Other major hubs that make up this trading session include Singapore, Sydney and Hong Kong.

The Tokyo trading session is characterized by thin liquidity unless there are major economic news coming from Japan, China, New Zealand or Australia. For this reason, it is better to watch and trade the major currencies from this session, that is; AUD pairs, NZD pairs and JPY pairs. Most traders will watch how the Asian session plays out and base the rest of the day’s trading decisions on it. For instance; a small Asian session range provides breakout opportunities at the London session open.

The London Trading Session;

The London trading session, also known as the European trading session (London being the global Forex capital), kicks off at 3am EST (EDT). Accounting for about 30% of global Forex transactions; the London session is the most volatile trading session.

The high liquidity observed during this trading sessions ensures lower spreads and also provides trend and breakout opportunities for traders. Also, given the high liquidity, most pairs are tradable with the most volatile times being on high impact news from the Eurozone, and Germany.

The New York Trading Session;

This session starts at 8am EST (EDT) and is also referred to as the US/North American session. This is characterized by high liquidity at the start as there is an overlap with the London session. Though most pairs are tradable, there is lesser liquidity at the end of the overlap with the London trading session. Major impact news are expected from the US and Canada.

Conclusion;

Forex traders should understand that though the Forex market operates for 24 hours a day; currency pairs exhibit different personalities depending on the trading session. They should then choose their trading hours and pairs based on these personalities. Overlaps between two trading sessions have high liquidity and hence provide the best trading times of the day and lower trading costs.

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