Forex trading sessions

Forex trading takes place 24 hours a day, five days a week, in various global financial centers. The market is divided into four major trading sessions, each representing a key financial hub around the world. Understanding these sessions is critical for traders since liquidity, volatility, and trading opportunities change throughout the day.

1) Sydney Session (Asian Session)

• Time (UTC): 10:00 PM – 7:00 AM

• Time (EST): 5:00 PM – 2:00 AM

• Major Currency Pairs: AUD/USD, NZD/USD, USD/JPY

Key Features:

• The forex market opens in Sydney, marking the start of the trading week.

• Liquidity is relatively low compared to other sessions.

• Traders focus on Australian and Asian currencies, particularly AUD, NZD, and JPY.

• Market movements tend to be slow unless influenced by major news from Australia, New Zealand, or Japan.

2) Tokyo Session (Asian Session)

Time (UTC): 12:00 AM – 9:00 AM

Time (EST): 7:00 PM – 4:00 AM

Major Currency Pairs: USD/JPY, EUR/JPY, GBP/JPY, AUD/JPY

Key Features:

• The Tokyo session overlaps the Sydney session for a few hours.

•The Japanese yen is experiencing increased trading activity.

• The market is moderately volatile. Large institutional traders and banks from Japan, Hong Kong, and Singapore participate. Economic news from China and Japan could have an impact on the market.

3) London Session (European Session)

• Time (UTC): 8:00 AM – 5:00 PM

• Time (EST): 3:00 AM – 12:00 PM

• Major Currency Pairs: EUR/USD, GBP/USD, USD/CHF, EUR/GBP

Key Features:

• London is the largest forex trading center, contributing the highest liquidity.

• The session overlaps with the Asian session (for an hour) and the U.S. session (for four hours).

• The highest volatility occurs during this session.

• Most economic reports from the UK and Europe are released, affecting the euro (EUR) and British pound (GBP).

• Institutional traders, hedge funds, and banks are highly active.

4) New York Session (North American Session)

• Time (UTC): 1:00 PM – 10:00 PM

• Time (EST): 8:00 AM – 5:00 PM

• Major Currency Pairs: EUR/USD, USD/JPY, GBP/USD, USD/CAD

Key Features:

• The New York session overlaps with the London session, creating peak volatility.

• Major U.S. economic reports (such as Non-Farm Payroll, CPI, GDP) are released, influencing USD movements.

• The U.S. dollar (USD) experiences high trading volume.

• Market activity slows down after the London session closes, but remains active until the evening.

Key Takeaways

• The forex market is open 24/5, divided into four major trading sessions.

• The London session has the highest liquidity and volatility.

• Overlapping sessions provide the best trading opportunities.

• Each session has different characteristics and major currency pairs that dominate trading activity.