The Forex market opens 24 hours, it on Sunday night (5 PM EST) and closes on Friday afternoon (4PM EST).When the Asian market closes its doors, the European market starts followed the US market then the Asian market open it doors again and etc.

So this means that you as a forex trader has total freedom on when to trade. This freedom in forex trading times is a big part of what makes forex trading so appealing. Anytime, anywhere someone is trading.

But not all times are equally good for forex trading. Some forex trading times are better or worse than others because of the volatility when a market opens or closes and the overlaps in between.

So the question you are going to ask is probably: When to trade?

We are going to try to answer that question here, but first let us make sure that we understand the world time differences. There are two world time methods that are widely used:

GMT:

Greenwich Meridian Time (GMT), is the current time in Greenwich – England and is considered the general world standard time (A leftover from the time of the British empire!).

If we use this system that means that the time in Greenwich is always 0 and all other locations east of Greenwhich adds a positive + to the GMT time. For example Tokyo time would be GMT +9. Countries west of GMT adds a negative – to the GMT time. An example of this could be Alaska which would be GMT -10. So if it is noon (12 pm) forex trading times in Greenwich, then it is 9 pm in Tokyo and 2 am in Alaska. Makes sense?

EST:

Eastern Standard Time (EST) is the other commonly used world clock system. It is the time of North America and is the same as GMT -5. So now when we know how to understand the world clock systems, let us have a look at the actual forex trading times and the major Forex trading time sessions. There are three major sessions in the Forex market. In each of these the volatility is much higher than usual and in each one there is different currencies being traded (in larger numbers than otherwise).

Asian Session (Tokyo) (7PM : 4AM EST):

The Asian forex trading session begins at 7 PM EST (12 AM GMT) and closes at 4 AM EST (9 PM GMT). The major countries involved in this session is Japan, Hong Kong and Singapore. In this session the most commonly traded currencies are GBP/JPY, GBP/CHF and USD/JPY. These currency pairs can fluctuate 110 pips during these forex trading times.

Other currencies that are traded are USD/CHF, AUD/JPY and GBP/USD which can fluctuate 60 pips.

U.S. Session (New York) (8 AM : 5 PM EST):

The US session kicks of at 8 AM EST and closes at 5PM EST. The US is a moderate to highly volatile session, because of its interaction on other markets such as the Stock or Bond market. The most traded currency pairs during these forex trading times are: GBP/USD, GBP/JPY and USD/JPY which fluctuate around 95 pips. There is also trading in USD/EUR and USD/CAD.

This session is both challenging and exciting. There is usually release of economic data early in the trading day and of those some reports cause the Forex market to move significantly. The stock, bond and commodities markets are also interlinked with the currency market so any news from those markets will also affect the Forex market and particularly the USD.

European Session (London) (2 AM : 12 PM EST)

London is the most important and biggest center for trading in the world at a market share higher than 30%. The majority of all Forex trades in the market are carried out during these forex trading times because of the high liquidity and efficiency of the market. This also makes the London session the most volatile of all.

All major currency pairs are traded during this session. For risk loving traders the GBP/JPY and GBP/CHF have very high fluctuations of up to and even surpassing 140 pips.

Other major currency trades include: EUR/USD, USD/CAD, USD/CHF and GBP/USD which fluctuate less but still up to an average of 100 pips. These currency pairs are a good pick because their volatility makes it easy to enter the market.

In this article we looked at the basic make up of the different forex trading times. In the next article we are going to look at individual strategies for trading during these forex trading times.