Major Forex Trading Sessions

Yaser Rahmati | یاسر رحمتی

Forex trading is a 24-hour market, but it's not active throughout the entire day. Instead, it operates through a series of trading sessions that correspond to the major financial centers around the world. Understanding these sessions can help traders maximize their opportunities and manage risk more effectively.

Sessions

1. Sydney Session

   • Time (UTC): 10:00 PM to 7:00 AM

   • Time (EST): 5:00 PM to 2:00 AM

   • Description: This session is relatively quiet compared to others, as it kicks off the trading day. It's particularly important for trading AUD (Australian Dollar) and NZD (New Zealand Dollar).

2. Tokyo Session

   • Time (UTC): 12:00 AM to 9:00 AM

   • Time (EST): 7:00 PM to 4:00 AM

   • Description: Also known as the Asian session, it includes Tokyo, Hong Kong, and Singapore. It is the second largest forex trading session and accounts for about 21% of total forex transactions. Pairs involving JPY (Japanese Yen) are highly active.

3. London Session

   • Time (UTC): 8:00 AM to 5:00 PM

   • Time (EST): 3:00 AM to 12:00 PM

   • Description: This is the largest forex trading session, covering nearly 34% of the total volume. It's highly active due to the overlap with the Asian and U.S. sessions. Pairs involving EUR (Euro), GBP (British Pound), and CHF (Swiss Franc) see significant movement.

4. New York Session

   • Time (UTC): 1:00 PM to 10:00 PM

   • Time (EST): 8:00 AM to 5:00 PM

   • Description: The second largest trading session, accounting for about 16% of the market. It overlaps with the London session, leading to high liquidity and volatility, especially for USD (U.S. Dollar) pairs.

Overlaps and Trading Opportunities

• Tokyo and London Overlap:

  • Time (UTC): 8:00 AM to 9:00 AM

  • Time (EST): 3:00 AM to 4:00 AM

  • Characteristics: Limited overlap, but some early volatility as London traders react to late Asian session moves.

• London and New York Overlap:

  • Time (UTC): 1:00 PM to 5:00 PM

  • Time (EST): 8:00 AM to 12:00 PM

  • Characteristics: The most active and volatile period of the trading day. High liquidity and substantial market movements.

Best Times to Trade

• During Session Overlaps: The London-New York overlap is the most active and provides the best trading opportunities due to high liquidity and volatility.

• During Major Economic Releases: News events and economic data releases can cause significant price movements. Trading during these times can be risky but also offers potential for high rewards.

Market Activity by Session

1. Sydney: Quieter, focusing on AUD and NZD pairs.

2. Tokyo: Moderate activity, focusing on JPY pairs.

3. London: High activity, with a broad range of pairs moving due to overlap with other sessions.

4. New York: High activity, particularly during the overlap with the London session. USD pairs are especially active.

Keywords

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