The overlap between London and New York sessions offers the best opportunities for currency traders..Forex Market Sessions and Time-Zones

The Foreign Exchange market is open and active 24 hours a day, 5 days per week. This unique feature allows Forex investors in all over the world to trade during their normal hours.

 

Two Time Zones

There are two Forex time zones (Summer and Winter):

  1. Summer Zone (April – October)
  2. Winter (approx. October – April)

 

Forex Market Sessions

Currencies trade 24 hours a day, 5 days a week. This round the clock trading process exists due to different time zones where markets operate in the four corners of the world.

The Foreign Exchange market is divided into four main sessions: the European, the North American, the Australian, and the Asian sessions. Alternatively, these sessions are called as the London, New York, Sydney, and Tokyo sessions. As it was mentioned before, there are two time zones (Winter and Summer Zones).

 

(a) WINTER ZONE (OCTOBER-APRIL)

EST (US) WINTER TIME ZONE

Typical EST/EDT Forex Winter Trading Hours:

  • London Session: from 3:00 am to 12:00 pm EST
  • New York session from 8:00 am to 17:00 pm EST
  • Tokyo session from 18:00 pm to 3:00 am EST
  • Sydney session from 16:00 pm to 1:00 am EST

GMT (UK) WINTER TIME ZONE

Typical GMT Forex Winter Trading Hours:

  • London session from 08:00 am to 17:00 pm GMT
  • New York session from 13:00 pm to 22:00 pm GMT
  • Tokyo session from 23:00 pm to 08:00 am GMT
  • Sydney session from 21:00 pm to 06:00 am GMT

The Forex market is open 24/5

(b) SUMMER ZONE (APRIL-OCTOBER)

EST (US) SUMMER TIME ZONE

Typical EST/EDT Forex Summer Trading Hours:

  • London Session: from 3:00 am to 12:00 pm EST
  • New York session from 8:00 am to 17:00 pm EST
  • Tokyo session from 19:00 pm to 4:00 am EST
  • Sydney session from 18:00 pm to 3:00 am EST

GMT (UK) SUMMER TIME ZONE

Typical GMT Forex Summer Trading Hours:

  • London session from 07:00 am to 16:00 pm GMT
  • New York session from 12:00 pm to 21:00 pm GMT
  • Tokyo session from 23:00 pm to 08:00 am GMT
  • Sydney session from 22:00 pm to 07:00 am GMT

 

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Forex Market Overlaps

An overlap occurs when two Forex markets are open at the same time. During an overlap, the liquidity and the trading activity get maximized.

EST (US) Summer Overlaps

  • New York and London sessions overlap: 8:00 am — 12:00 noon EST
  • London and Tokyo sessions overlap: 3:00 am — 4:00 am EST
  • Sydney and Tokyo sessions overlap: 19:00 pm — 3:00 am EST

GMT (UK) Summer Overlaps

  • New York and London sessions overlap: 12:00 pm - 16:00 pm GMT
  • London and Tokyo sessions overlap: 07:00 am - 08:00 am GMT
  • Sydney and Tokyo sessions overlap: 23.00 pm - 07:00 am GMT

 

Three Key Forex Market Overlaps

These are the three key Forex trading overlaps:

 

(1) American-European Overlap: 12:00 to 16:00 GMT

This overlap offers the most active Forex trading hours. Especially as concerns the three major European currencies (Euro, British Pound Sterling, and Swiss Franc). Note that during 12.00 and 14.00 three markets are open simultaneously (New York, London, and Frankfurt). The American-European overlap includes 70% of the total average trading range of the European trading hours and 80% of the total average trading range of the US trading hours.

  • Most Active Pairs: EURUSD, EURGBP, GBPUSD, USDCHF, EURCHF, and GBPCHF

(2) Asian-European Overlap: 07:00 AM to 08:00 AM GMT

The Asian- European overlap begins with the opening of the three major European Markets (London, Frankfurt, and Zurich) and lasts 1 hour.

  • Most Active Pairs: USDJPY, EURJPY, GBPJPY, and CHFJPY

(3) Australian-Asian Overlap: 00:00 to 06:00 AM GMT

This Overlap involves the intersection of many Financial markets in Asia and Oceania (Tokyo, Singapore, Shanghai, Australia, New Zealand, and Hong Kong).

  • Most Active Pairs: AUDUSD, EURAUD, NZDUSD, AUDJPY, AUDNZD and NZD/JPY

 

The Best Times and Days to Trade Forex Currencies

The overlapping times between two Forex sessions provide wider volatility (pip range movement) and the highest degree of liquidity.

The Best Times to Trade Forex

The London session is traditionally the most active Forex session as it involves transactions from a great number of European countries (UK and EU countries). The second most active session is the New York session. The overlap between these two sessions (London and New York) offers the best opportunities for currency traders. Note that during 12.00 and 14.00 GMT three markets are open simultaneously (New York, London, and Frankfurt).

  • 12:00 to 14:00 GMT

The Best Days to Trade Forex

The best days to trade occur in the middle of the week.

  • Tuesday, Wednesday, and Thursday

Notes:

-Fridays are also active until 17.00 GMT

-Avoid trading in the last days of each month, especially in the last days of each quarter

-Be careful when trading on late Wednesdays. At 12.00 (midnight) the rollover rates are tripled to cover weekends

 

 

The Best Months to Trade Forex Currencies

Based on statistics, each different currency pair has its good and bad months for trading. For example, during Decembers, the European Euro performs very well against the US Dollar.

Chart: The Average EURUSD Monthly Returns

Check Forex Pairs: » EURUSD | » GBPUSD | » USDJPY | » USDCAD | » EURGBP | » AUDUSD | » NZDUSD

 

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Forex Time Zones

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