Forex Trading Sessions

The forex market has no single exchange and no closing bell during the week. Trading follows the sun from one financial centre to the next, from Sunday evening to Friday evening New York time. Activity, volatility and spreads change a lot across the day depending on which centres are open. Knowing the sessions helps traders pick the right times to trade their pairs and avoid thin, expensive periods. The general idea of sessions across markets is in Trading Sessions.

The four main sessions#

Times are approximate and shift with daylight saving changes.

The Bank for International Settlements survey shows the UK accounts for the largest share of global forex trading, about 38% in 2022, followed by the United States at about 19%. See FX Liquidity.

The London and New York overlap#

From roughly 12:00 to 16:00 UTC (8:00 a.m. to noon New York time), both London and New York are open. This is typically the most liquid and volatile period of the day, especially for EUR/USD, GBP/USD and USD/CHF. Major US economic data is released at 8:30 a.m. New York time during this overlap, often causing the day's biggest moves. See Trading Economic Releases.

Which pairs move when#

Key times in the trading day#

• Sunday open: liquidity is thin, and prices can gap from Friday's close after weekend news.
• Tokyo fix (9:55 a.m. Tokyo time): a reference rate used by Japanese companies. See FX Fixings: London and Tokyo.
• London open (around 07:00 to 08:00 UTC): volume surges; ranges set in Asia are often broken.
• London 4 p.m. fix (WM/Reuters): a benchmark used by funds for valuations; can cause sharp moves in the minutes around it.
• New York close (5:00 p.m. New York time): daily cut off for rollover; spreads widen in the following hour. See Rollover and Swap in Forex.

Session based strategies#

• Asian range breakout: mark the high and low of the Asian session and trade breaks at the London open.
• London open momentum: trade the direction of the first strong moves after London opens.
• News trading in the overlap. See News Trading.
• Range trading in quiet hours, with tight risk control. See Range Trading.

Weekends and holidays#

Forex closes from Friday evening to Sunday evening New York time. Holidays in major centres, such as Christmas, New Year and US Thanksgiving, bring thin liquidity and wider spreads. Japanese Golden Week and Chinese holidays reduce Asian liquidity.

Common mistakes#

• Trading during the rollover hour when spreads are widest.
• Applying strategies outside the session they were designed for.
• Ignoring daylight saving shifts, which move session times relative to your clock.

Frequently asked questions#

What are the forex trading sessions?#

The Sydney, Tokyo, London and New York sessions, which together cover 24 hours a day from Sunday evening to Friday evening New York time.

What is the best time to trade forex?#

For most major pairs, the London and New York overlap, roughly 12:00 to 16:00 UTC, has the highest liquidity and volatility.

Why do forex spreads widen at 5 p.m. New York time?#

Because it is the daily cut off and rollover time, when many banks reset systems and liquidity is thinnest.

Next, compare spot forex with currency futures in Forex vs Futures.

Sources#

• Bank for International Settlements, Triennial Central Bank Survey