Forex markets are Open 24/5.5 — you must be wondering what does 5.5 mean? Let me elaborate… FX markets open on Sunday evening (that’s where the 0.5 comes from)& run through to Friday evening @ 1700 ET. Unlike Equities which open & close at a fixed time the World over, Forex markets just roll over into the next time zone so they either overlap or switch over. The table below shows how the cycle works.
So basically when New York closes @ 1700 ET it opens up concurrently in Sydney so there are no gaps as such and so forth. Just wanted to tell you guys a little bit about the dynamics of the 3 sessions in FX market. I primarily trade in USD Majors (EURUSD etc.) but have occasionally traded in Minors like EURJPY as well. I am going to share which pairs to trade and what are the most active times to trade in these 3 sessions.
Asian session is known for range trading and a little bit boring, but if you don’t like too much volatility this is the best time for you. You will seldom see a breakout specially in the USD Majors unless there is a major catalyst. The volume picks up after Tokyo opens and peaks in between 2000–2230 ET when the rest of the big Asian markets kick in. The best pairs to trade are USDJPY, AUDUSD & NZDUSD but also the Yen pairs are the most active in this time period as well (EURJPY, GBPJPY, AUDJPY, NZDJPY) if you are looking to trade minors.
European session starts to roll over around 0200 ET until the biggest FX OTC market of the world (London) opens @ 0500 ET and the big players starts to pitch in with their trades. Best USD Majors to trade in this period are EURUSD , GBPUSD & USDCHF along with other Euro crosses (EURGBP, EURAUD, EURAUD). This session usually sets the tone for FX trading for the rest of the day. The hours between 0300–0500 see the highest volume & biggest moves in the most of the currency pairs.
North American session starts to kick in around 0800 ET and is known to be the most volatile & the one when most of the breakouts occur specially in the USD Majors. All the USD crosses usually expand on the ranges already established in the earlier two sessions. This is usually the time that I trade most for FX — with my favorite pair USDCAD giving me ample opportunities among EURUSD & GBPUSD. In between 0830–1100 ET is the most active trading time for FX markets since the European & North American markets overlap. Most of the US data releases are scheduled during this time period as well… not that I am a fan of trading fundamentals!
So you can pick & choose which trading session suits your trading style & also depending where in the World you are located.