Now that you know what forex is, why you should trade it, and who makes up
the forex market, it's about time you learned when you can
trade.
Yes, it
is true that the forex market is open 24 hours a day, but that doesn't mean
it's always active the whole day.
You can
make money trading when the market moves up, and you can even make money when
the market moves down.
BUT you will
have a very difficult time trying to make money when the market doesn't move at
all.
And
believe us, there will be times when the market is as still as the victims of
Medusa. This lesson will help determine when the best times of the day are to
trade.
Market Hours
Before
looking at the best times to trade, we must look at what a 24-hour day in the
forex world looks like.
The forex market can be broken up into four major trading
sessions: the Sydney session, the Tokyo session, the London session, and Pipcrawler's favorite time to trade, the New York session. Below are tables of
the open and close times for each session:
Summer (approx. April - October)
|
Time Zone
|
EDT
|
GMT
|
|
Sydney
Open
Sydney Close |
6:00
PM
3:00 AM |
10:00
PM
7:00 AM |
|
Tokyo
Open
Tokyo Close |
7:00
PM
4:00 AM |
11:00
AM
8:00 AM |
|
London
Open
London Close |
3:00
AM
12:00 PM |
7:00
AM
4:00 PM |
|
New
York Open
New York Close |
8:00
AM
5:00 PM |
12:00
PM
9:00 PM |
Winter (approx. October - April)
|
Time Zone
|
EST
|
GMT
|
|
Sydney
Open
Sydney Close |
4:00
PM
1:00 AM |
9:00
PM
6:00 AM |
|
Tokyo
Open
Tokyo Close |
6:00
PM
3:00 AM |
11:00
PM
8:00 AM |
|
London
Open
London Close |
3:00
AM
12:00 PM |
8:00
AM
5:00 PM |
|
New
York Open
New York Close |
8:00
AM
5:00 PM |
1:00
PM
10:00 PM |
Actual
open and close times are based on local business hours. This varies during the
months of October and April as some countries shift to/from daylight savings
time (DST). The day within each month that a country may shift to/from DST also
varies.
You can see that in between each session, there is a period of
time where two sessions are open at the same time. During the winter, from
3:00-4:00 am EDT, the Tokyo session and London session overlap, and from 8:00 am-12:00 pm EDT, the London session and the New York session
overlap.
Naturally,
these are the busiest times during the trading day because there is more volume
when two markets are open at the same time. This makes sense because during
those times, all the market participants are wheelin' and dealin', which means
that more money is transferring hands.
Now, you're probably looking at the Sydney open and thinking why
it shifts two hours. You'd think that Sydney's open would only move one hour
when the U.S. adjusts for standard time, but remember that when the U.S. shifts
one hour back, Sydney actually moves forward by one hour (seasons are opposite
inAustralia). You should always remember this if you ever
plan to trade during that time period.
Let's take a look at the average pip movement of
the major currency pairs during each trading session.
|
Pair
|
Tokyo
|
London
|
New York
|
|
EUR/USD
|
76
|
114
|
92
|
|
GBP/USD
|
92
|
127
|
99
|
|
USD/JPY
|
51
|
66
|
59
|
|
AUD/USD
|
77
|
83
|
81
|
|
NZD/USD
|
62
|
72
|
70
|
|
USD/CAD
|
57
|
96
|
96
|
|
USD/CHF
|
67
|
102
|
83
|
|
EUR/JPY
|
102
|
129
|
107
|
|
GBP/JPY
|
118
|
151
|
132
|
|
AUD/JPY
|
98
|
107
|
103
|
|
EUR/GBP
|
78
|
61
|
47
|
|
EUR/CHF
|
79
|
109
|
84
|
From the
table, you will see that the European session normally provides the most
movement.
Let's
take a more in depth look at each of the session, as well as those periods when
the sessions overlap.
