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What are the best times to trade?

AnalyticsTrade Team
AnalyticsTrade Team Last updated on 20 Apr 2023
Category: Trading
Trading times by sessions in the capital market

Table of Contents

Optimal trading time refers to when the market is most active. Knowing that a global market can have such specific timings is interesting. The timings are not a vague “afternoon” sort of time.

They are much more specific and exact.

The forex market is notorious for being highly liquid. Considering this, traders opt to engage in the market when profits are most likely. There are four main timings that every trader should know. These are known as trading sessions.

What are the trading sessions and their timings?

A fun fact is that a crossover between two trading sessions increases the opportunity for a successful trade. Let’s go over these in more detail.

We just learned that a crossover between sessions could yield higher opportunities. This is because there are tighter spreads and higher price ranges, so there is a greater chance of winning a trade.

The main key trading sessions, according to the time zones, are as follows:

1. Sydney

Opens: 6:00 PM EDT, 4:00 PM EST, 10:00 PM GMT

Closes: 3:00 AM EDT, 1:00 AM EST, 7:00 AM GMT

2. Tokyo

Opens: 7:00 PM EDT, 6:00 PM EST, 11:00 PM GMT

Closes: 4:00 AM EDT, 3:00 AM EST, 8:00 AM GMT

3. London

Opens: 3:00 AM EDT, 3:00 AM EST, 7:00 AM GMT

Closes: 12:00 PM EDT, 12:00 PM EST, 4:00 PM GMT

4. New York

Opens: 8:00 AM EDT, 8:00 AM EST, 12:00 PM GMT

Closes: 5:00 PM EDT, 5:00 PM EST, 9:00 PM GMT

EDT= Eastern daylight time

EST= Eastern standard time

GMT = Greenwich mean time

Generally, the forex market is functional from 5 PM Sunday to 4 PM Friday EST.

Trading times by sessions in the capital market
Trading times by sessions in the capital market

Are there any differences among the sessions?

Regarding individual currencies, the US dollar is traded heavily throughout all the sessions.

Conversely, Asian currencies and currencies involving the Australian dollar (AUD), the New Zealand dollar (NZD), and the Japanese dollar (JPY) are better traded during Sydney and Tokyo sessions.

The London/New York overlap is, thus, the most beneficial for traders, considering this is the time the largest sessions are open.

More specifically, traders consider 8 AM to noon as the best time to trade during the overlap of London and New York sessions. If traders prefer the Sydney session, the best times are 5 PM to 6 PM, when the London/New York overlap has much less volume.

Final thoughts

The London session has the highest turnover, accounting for thirty-seven percent of all forex transactions! The London/New York overlap produces the most price swings and lower spreads – accounting for 50 percent of all forex trades.

Of course, these are not set in stone, and exceptions can exist. Nevertheless, the general times forex traders follow is what we have just gone over.

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AnalyticsTrade Team

AnalyticsTrade Team

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