Forex trading is not done at one central location, but it is rather conducted by traders residing in different countries around the world. Because of different time zones, trading is conducted 24 hours a day, 5 days a week.
In general, the market is open from 5 PM EST on Sunday to 4 PM EST on Friday. Between these times, there always is at least one market open. Sometimes, there is more than one market open at the same time.
This happens when the working hours of the financial markets overlap. Because of this, there always are people trading Forex at any given time. Currencies are also always needed by international central banks and global business representatives.
Understanding Forex market active hours can be very beneficial for traders. In today’s guide, we are going to discuss the opening hours of different markets globally. So, follow our guide to learn how Forex market hours work.
Forex market operating hours
The Forex trading market, as we have already said, operates in multiple time zones. Because of this, it can be accessed any time, except for the weekends. The market involves a global network of traders, investors, hedge funds, management firms, and many others, who participate in trading activities daily.
To put it shortly, Forex trading hours are based on when trading is open in each participating country. In New York, the market opens at 1 pm UTC time and closes at 10 PM. In Tokyo, the market opens at 12 AM UTC time and closes at 9 AM. For Sydney, the market here is open from 10 pm UTC time, to 7 AM UTC. The Forex trading market in London is open from 8 PM UTC to 5 PM UTC.
As you can see, at a certain time, the Sydney market overlaps with the Tokyo session, then, the Tokyo session overlaps with the London session. New York and London sessions also overlap, resulting in the largest activity in the market.
London and New York time zones are regarded to be the busiest time zones. The period when these two overlaps is the busiest period and account for the majority of volume traded in the Forex market. Because of this, many experts say that this might be the best time to trade Forex.
Forex markets hours of operation – How does it work?
The Forex trading market is able to stay open 24 hours because of the different international time zones, as have already said. Traders in Forex participate through networks of computers, and they don’t even have to leave the comfort of their homes.
Because of this, there is no particular time during the weekdays when the market closes. For example, you might have heard at some point at the Euro closed at a certain rate. This simply means that it was a price of the Euro when the market closed in Europe.
Although the market is closed locally, thanks to Forex market working hours, other sessions are still open, which makes it possible for people to still trade Euro. On the other hand, securities, such as domestic stocks, for example, are not as relevant on the international stage.
Because of this, they do not require to be traded beyond the standard business day. Europe has several financial centers, the biggest one being London. Others are Pairs, Frankfurt, and Zurich.
Forex trading first opens in the Ausratalasia region every day. Then, Europe follows, after which, North American markets open as well. As we have already mentioned throughout this guide, if you look at the Forex hours map, you can see that as the market of one region closes, another one opens, which gives people the ability to continue trading.
What is the best time to trade Forex?
While talking about Forex market working hours, many want to know what is the best time for trading. In general, it is better to trade when two markets are open at the same time. This ends up creating a lot of activity in the market, which can be very beneficial for traders.
The most activity in the market can be seen when European and North American markets are open at the same time. Thus, many believe that it might be the best hours for Forex trading.
Traders should keep in mind that while the market is open 24-hours a day, there are some currencies from emerging markets that can not be traded 24 hours a day. On the other hand, the most traded currencies in the world are the US dollar, the Euro, the Japanese yen, the British pound, the Australian dollar, the Canadian dollar, and the New Zealand dollar, all of which can be traded 24 hours a day 5 days a week.
People like to trade during high activity hours because, at this time, the spreads are the tightest. This reduces transaction costs for traders, which can be very beneficial.
Final thoughts on Forex market working hours
Because of the way of its operation, Forex trading is probably the most unique market globally. As we have already said, the market stays open 24 hours a day, 5 days a week.
The major markets in Forex are New York, Tokyo, Sydney, and London. Sometimes, some of these markets are open at the same time. When North American and European markets overlap, the market sees the most activity, resulting in tighter spreads. Because of this, many prefer to trade during this time.