After Hours Trading Pre- & After-Market

During this period, there is an increase in trading volume, volatility, and liquidity. During the weekdays, there’s always at least one forex trading session open although there are periods of downtime when the market is really quiet and trading volume is low or “thin”. Knowing the forex market’s operating hours is essential for a trader. You need to know when the forex market opens and closes as well as the four main trading sessions.

As we discussed earlier, when the market in New York opens, the London trading session has already progressed halfway for the day. As a result, the trading volume in the Forex market typically reaches the highest during the day at the opening hours of the New York trading session. While the actual trading strategy you have may not change, knowing when to trade can certainly help you stop wasting time looking for trades when are no trading opportunities in the market. Furthermore, success in Forex trading in highly depends on timing, as trends can often reverse and wipe out the profits in your open trades. This is just a simple example, but this is the reason why often prices start to move, and trends are created. Consequently, the prices of these currencies will fluctuate more compared to outside of the banking hours.

What are the main forex trading sessions?

Click on a time zone for Daylight Saving Time (DST) transition dates and times. During the London and New York session, you can use breakout strategies to identify key entry and exit points. And during lower volatility sessions (like the Asian session), you can think of using range bound strategies that seek to buy near support levels and sell near resistance points. BlackBull Markets is a reliable https://forexarticles.net/software-developer-vs-software-engineer/ and well-respected trading platform that provides its customers with high-quality access to a wide range of asset groups. The broker is headquartered in New Zealand which explains why it has flown under the radar for a few years but it is a great broker that is now building a global following. The BlackBull Markets site is intuitive and easy to use, making it an ideal choice for beginners.

• Globally, forex session times are a general indication not hard fixed times – they are influenced by many factors, including when local business’ open and close.
• The majority of foreign exchange transactions are done by big financial institutions and dealers – only a small portion is done by retail traders.
• By looking at the average pip movement of the major currency pairs during each forex trading session, we can see that the London session has the most movement.
• The combined share of the top four trading centers, which includes London, New York, Singapore, and Hong Kong amounts to 75% of global FX turnover.
• Learn more about FX trading with us or open an account to get started.

Moving further on in time during the trading day, Tokyo then overlaps with London between 3 AM and 4 AM EST. As the U.S. market closes in New York, the markets in Australia and Asia begin to open, with Sydney and Tokyo overlapping between 7 PM and 2 AM EST. They are limiting their exposure to large fluctuations in currency valuations through this strategy. Let’s take a look at three major Forex market hour-based strategies you can apply today to improve your win rate and increase profitability. All times are indicative and may vary seasonally due to local holidays and Daylight Saving Time (DST).

Trade on your schedule, not the market’s

The forex trading sessions are named after major financial centers and are loosely based on the local “work day” of traders working in those cities. The foreign exchange market, or forex, is a global decentralized market. Optimal times to trade the forex market are when the market is most active, which is often when the trading hours of major regions overlap.

• Trading stocks, options, futures and forex involves speculation, and the risk of loss can be substantial.
• Because during this time, two of the largest financial centers are operational, which increases liquidity in the market.
• Companies will buy and sell currencies to conduct foreign trade and to pay for employees located in different countries around the world.
• Over 50% of these daily trades take place when the New York and London sessions overlap, making this one of the most popular times to trade to take advantage of the high turnover.
• This brings me to a very common misconception in the Forex world – the idea that the market closes on weekends.

Use the Forex Market Time Zone Converter tool below to view the open and close times of the main forex trading sessions in your own local time zone. When you first came to know about the global currency market, you probably came in touch with marketing materials claiming that this market remains open 24 hours a day and seven days a week. Anyone who traded equities (stocks) or any other commodities knows that stock exchanges or other markets are usually open during banking hours in a day. However, being a decentralized market, the Forex market has no rigid trading hours. The period when these two trading sessions overlap (London afternoon and New York morning) is the busiest period and accounts for the majority of volume traded in the $6 trillion a day market.

Our forex trading hours

This is why short-term retail Forex traders should trade only during active banking hours and avoid looking for trading opportunities when the forex market hours clock stops ticking. The forex market and the stock market operate in different time zones and have different trading hours. The forex market is open 24 hours a day, five days a week, while the stock market has set trading hours that vary by region. In general, the stock market is open during business hours in the region where it is located. The best time to trade forex is when the market is most active – this is when you’ll get the narrowest spreads and best chance of executing a trade at your desired levels. The forex market is usually most active when the market hours overlap between sessions, as this is when the number of traders buying and selling each currency increases.

International currency markets are made up of banks, commercial companies, central banks, investment management firms, hedge funds, as well as retail forex brokers and investors around the world. For instance, when you hear that the U.S. dollar closed at a certain rate, it simply means that was the rate at market close in New York. That is because currency continues to be traded around the world long after New York’s close, unlike securities. Its trading hours are separated into sessions which overlap throughout the day and correspond to when the market opens in major financial centers. Before you start trading, you must know about the various forex trading sessions and how they work. Equally important is that you understand how trading hours affect market volatility.

What are the Forex market hours?

Likewise institutional traders also favor times with higher trading volume, though they may accept wider spreads for the opportunity to trade as early as possible in reaction to new information they have. Ultimately, with the varying business hours, overlapping activity time, and tricky considerations for every time zone, the best strategy is adaptation. And that is adapting your trading style to match the level of liquidity, the spreads, the momentum of every region. Otherwise, you can also choose to trade the currencies that fit your tactics. It has a lot to do with observation, planning, and trying to avoid common pitfalls. We leave you with the recommendation to always start by practicing and trying your strategies on a demo account.

The London session sees the release of key European news which often adds to existing volatility. The USD is the world’s most traded currency, and announcements during the New York session can prove to be major market movers. The stock market, on the other hand, typically operates according to the time zone where the exchange is located. For instance, the NYSE operates based on Eastern Standard Time (EST), while the TSE operates on Japan Standard Time (JST). There can be exceptions, and the expected trading volume is based on the assumption that no major news will come to light.