Hedge funds with international exposure often buy and sell a large number of stocks across the globe to diversify their portfolios. Coincidentally, some of the major forex exchange hubs also host the major stock exchanges. For example, the NASDAQ and the New York Stock Exchange are located in, you guessed it right, in New York; The London Stock Exchange is located in London, and the Tokyo Shoken Torihikijo is based in Tokyo.

So, cross-border investments that require moving funds from one end of the globe to another generally contributes to a higher level of trading volume in the global foreign exchange market. Furthermore, when banks and stock exchanges in more than one major financial centers are open simultaneously, the trading volume and liquidity go up substantially.

This is why the beginning of the New York trading session has usually generated the bulk of the trading opportunities for short-term traders because it opens when the London trading session is also open across the Atlantic. Hence, if you overlay the trading volatility in a forex market hours chart, you can see that it spikes up when trading begins in the financial center located next in the time zone.

And so Overlapping hours of the London trading session and the New York trading session is the best time to trade forex, since the market is most active.

If you are a swing trader or a trend trader who likes to keep positions open overnight or several days at a time, then paying attention to the forex market hours chart in figure 2 may not be that important.

However, most Forex traders are day traders and different trading sessions based on the time zone and geographic location of the financial centers around the world will have a substantial impact on the bottom line. While the actual trading strategy you have may not change, knowing when to trade can certainly help you stop wasting time looking for trades when are no trading opportunities in the market.

Furthermore, success in Forex trading in highly depends on timing, as trends can often reverse and wipe out the profits in your open trades. Knowing when to enter and exit the market based on active Forex market hour can have an immensely positive impact on your profitability and aid in building the confidence you need to succeed in this agile market environment.

Let's take a look at three major Forex market hour-based strategies you can apply today to improve your win rate and increase profitability.

Price gaps are the areas on a price chart that represents a missing price data in a chart. While a lot of brokers also show price gaps in line charts, it is best illustrated in a bar or candlestick chart. When a currency pair sharply goes up or down with no transaction in between, it is represented in a price gap. While most brokers suspend trading during the weekend, the fact is that economic news and geopolitical events still occur on Saturdays and Sundays.

As a result, the valuation of different currency pairs can change after the brokers suspend trading on Friday. When the market re-opens on Monday morning, at a. in Sydney time, you will often see that there is a huge gap between the closing price of Friday and the opening price on Monday. For example, let's say a hostile country like Iran might have announced to test a nuclear weapon after the market closed on Friday. As a result, the value of the U. Dollar may drop during the weekend.

Trading price gaps on Mondays can be very profitable as most often gaps are filled before the actual trend takes place, be it the continuation of the trend in the direction of the price gap or a complete reversal. While the uptrend continued throughout Monday, a bearish retracement started on Tuesday, July 2, , and the gap was filled before the uptrend resumed. Hence, often major trends start and end during the London Forex market hours. If you are a Forex trader who applies breakout trading strategies, it makes perfect sense to look for breakout trades at the opening hours of the London market open.

To do so, of course, you need to trade in smaller time frames like the 5-minute or the minute charts. In terms of the actual trading strategy, trading during the London market opening hour is no different than trading any other time of the day. However, given the significant increase in trading volume at this time, it makes breakout trading much more lucrative. But, as soon as the market opened at a. If you are a breakout trader, and only have an hour to trade per day, looking for trading opportunities during the London market opening hours can often provide you with ample trades that you may not find at any other time of the day.

As we discussed earlier, when the market in New York opens, the London trading session has already progressed halfway for the day. As a result, the trading volume in the Forex market typically reaches the highest during the day at the opening hours of the New York trading session.

To illustrate the situation at the opening of the New York trading session, take a look at figure 5 to see how the trading volume spiked up the moment market opened. Most short-term intraday traders decide to trade during the second half of the London session. Because during this time, two of the largest financial centers are operational, which increases liquidity in the market.

High market liquidity is a pre-requisite of low spreads and short-term traders who only bag pips at a time need low spreads to reduce their cost of business. If you are an intraday trader, trading during this particular time of the day will certainly be going to increase your odds of success regardless of which technical trading strategy you are pursuing.

In the traditional investment environment, volatility is seen as an adverse condition that is associated with risks. In fact, academic finance loathes volatility and try to develop investment strategies that reduce its effect on a portfolio.

However, speculative trading, such as trading in the Forex market, requires a decent level of volatility to generate profits. After all, without ample volatility, when the market remains too calm, no profitable trades can be executed. Hence, knowing which time of the day the Forex market remains most active is an integral part of becoming a successful trader. The best time to trade the global foreign exchange market is when other traders are active in the market and trading volume remains healthy enough for spreads to remain tight.

When banks, stock markets, and commodity exchanges in major financial centers are operational, it creates the underlying liquidity in the Forex market that is necessary for volatility. You can be a price action trader, or your strategy might rely on a combination of technical indicators to generate trading signals. Regardless of how you trade, knowing when to trade can make or break your strategy.

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Forex Market Hours. Use GMT Time. Forex Market Session Times - Currently Open or Closed Session Current Status Countdown Current Local Time Sydney Session Closed Opens in 01 Hours 40 mins local Time Tokyo Session Closed Opens in 03 Hours 40 mins local Time London Session Closed Opens in 12 Hours 40 mins local Time New York Session Open Closes in 02 Hours 40 mins local Time.

Forex Market Hours Session Times in EST and GMT U. Many investors consider the best trading time to be the 8 a. to noon overlap of the New York and London exchanges. On the flip side, from 5 p. There can be exceptions, and the expected trading volume is based on the assumption that no major news will come to light. Political or military crises that develop during otherwise slow trading hours could potentially spike volatility and trading volume.

Certain economic data that can move the market has a regular release schedule. Key economic data include employment figures, Consumer Price Index CPI , trade deficits, and consumer confidence, and consumer consumption. Knowing when this news is set for release can help you plan when to trade. Forex traders should proceed with caution, because currency trades often involve high leverage rates of 1, to 1.

While this ratio offers tantalizing profit opportunities, it comes with an investor's risk of losing an entire investment in a single trade. Forex trading is risky. New forex investors should consider opening accounts with firms that offer demo platforms, which let them make mock forex trades.

With the practice trades, you can tally gains and losses to see how you would perform with real trading. Once investors learn become more experienced, they can begin making real forex trades. Like many other investments, you can earn significant profits, but you could also suffer losses.

So, make it a point to prepare for the risks involved. Forex trading is the trading of different currencies to make money on changes in currencies' values relative to one another. Most of this trading occurs via electronic platforms or over the phone rather than on exchanges. Each trade involves a pair of currencies.

Your ability to make money trading forex depends on the proportion of trades you profit from and the size of your profits, not necessarily the time you spend. To start trading forex , you'll need to make an initial deposit with a brokerage. Consider making practice trades on a demo platform before you start risking your real money.

Northwestern Mutual. New York University Stern School of Business. Census Bureau. In This Article View All. In This Article. The 4 Major Forex Markets. Worldwide Forex Markets Hours. High-Volume Trading Hours Can Be Risky. Frequently Asked Questions FAQs. Key Takeaways Four major foreign exchange markets in London, New York, Sydney, and Tokyo have different trading hours.

Indian Standard Time IST is 5. Also Like: World Stock Market Timings as per Indian Timings. Also Read: Indian Stock Market Timings — All Time in 1 Guide. Must Know: What Is Forex Trading? Also Like: Top 5 Best Technical Analysis Software. Trading Fuel is our blog website where we give you knowledge about finance, economics, the stock market, and intraday trading. Stay tuned with us for more such blogs. Must Know About: Top Participants in The Foreign Exchange Market.

Prashant Raut is a successful professional stock market trader. He is an expert in understanding and analyzing technical charts. With his 8 years of experience and expertise, he delivers webinars on stock market concepts.

Share Share on Facebook Share on Twitter Pinterest Email. The forex trading timings in India are as per the Indian Standard Time IST. Hence, the market will open on Monday early morning and close on Saturday early morning. Also Like: World Stock Market Timings as per Indian Timings Table of Contents. Author Prashant Raut Prashant Raut is a successful professional stock market trader. Prev Post Was the Future Market a Cash Market? August 30, 4 Mins Read.

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So, when exchanges in two markets are open, the number of traders actively buying and selling a given currency greatly increases. Media Trade Our Money Trading The Maverick Way Firm Capital Access The Application Process Frequently Asked Questions Jobs Continuing Education Contact Us Reviews. Why Some of the Forex Trading Hours are More Active Than Others Technically speaking, if you exchange U. The window when the forex market is at its most sluggish, relatively, is between 5 pm to 6 pm EST when New York and London are not functional at the same time. This will allow you to learn how to invest appropriately and how basically everything influences the stock market. Post comment.

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