The 4 Major Forex Exchanges

Active markets usually provide more opportunity for traders, regardless of what type of market you chose to deal with. Whether you’re dealing with Forex, Stock or Commodity market you would always benefit from additional activity injected into the marketplace. But for Forex traders, there is one good reason for entering the market at peaks of its activity – volatility. Generally there are four major trading sessions known to traders – London, New York, Tokyo. Each session covers particular market hours when exchanges and financial institutions are working in the mentioned economies.

Markets are most active when exchanges and financial institutions in the mentioned regions are working simultaneously which usually matches the time of highest volatility on the market. Although volatility can be dangerous, especially to those who don’t know how to approach it properly, the extent to which the rates of currency changes at time of volatility can be good for traders. In other words, the more volatile is the market the bigger is the range of fluctuations that currencies sustain and hence the more profit the trader can make. When markets are calm – prices remain flat and trading can hardly bring any substantial profits. That is why it is vital to identify the best hours to trade forex in order to hammer out a compromise between risk and opportunity.

Worldwide Forex Markets Hours

forex market hours
There exist fifteen different exchanges on the forex market. All exchanges work five days per week 24 hours a day. The biggest activity on the market comes to the time when following exchanges are active (all times are GMT):

  • London: 8 AM to 17 PM (noon)
  • New York: 1:00pm to 10 PM
  • Singapore: 8 PM to 5 AM (midnight)
  • Tokyo: 12 AM to 9AM

Forex Trading Hour Overlaps

Same currencies are traded on the mentioned exchanges. As such, most active market hours are when at least 2 of the exchanges are active at the same time. While most active trades are happening when London and New York sessions overlap, traders should not ignore an opportunity to take advantage of Tokyo and Singapore sessions when markets are generally more stable and less vulnerable to sudden price swings.

When you look at the exchange hours listed above, it becomes clear that trading hours on major exchanges occur in two markets simultaneously from:

  1. 1PM to 17PM (noon) GMT, when both New York and London exchanges are open
  2. 8 PM to 10 PM, when both New York and Singapore exchanges are open
  3. 12 AM to 5 AM (midnight) GMT, when both Tokyo and Sydney exchanges are open
  4. 8 AM to 9 AM GMT, when both Tokyo and London exchanges are open

Best Hours to trade Forex

These overlapping sessions are considered to be the best time for trading forex. But even out of these 4 one stands out in particular – the time when London and New York session overlap. This is because the volume traded on these two trading centers accounts for more than 50 percent of all volume traded on foreign exchange market. Some market hours however are not so promising. For example, from 10PM to 11PM GMT can hardly provide anything worth spending time for a trader as most of the activity comes from Singapore region during these hours, usually accounting to not more than 10 percent of all market activity.

If, however, there was a political or military crisis anywhere in the world that developed during this hour, volatility and trading volume would predictably spike in response, making this a very favorable time to trade. In any case, there is a set of variables which should be taken into account when choosing best forex market hours.

Is “best” really the most profitable?

If you’re just beginning to trade on the Forex, it’s a good idea to proceed cautiously. As was mentioned before, volatility can be a blessing as it can be a curse, and beginner traders should not take it so lightheartedly unless they are ready to take the risks of having their funds wiped out. Consider trading on demo account before rushing heads on into action. Register with us to get access to free eBooks from our collection to get more information.

By Ricardo Martinez

Ricardo Martinez has been active in the financial markets for around 10 years. In the early days in his career he was a trader and worked as market analyst in different online brokers advising clients on key decisions of trading instruments in foreign exchange and commodity markets. Ricardo is currently working as independent trader with diversified portfolio over different markets. His writing for LearnMarketonline is part of his commitment to share knowledge with traders.