Forex Market is a 24 hours market available 5 days a week. Thus a trader can trade it anytime. But during the 24 hours, not all currency pairs stay active or having tradable liquidity.
Some currency pairs stay volatile during a certain time of the day.
The 24 hours of full-day covers almost 10+ major stock exchange opening & closing time globally. When the stock market opens all traders buy/sell shares, they do this transaction with money, i.e currencies. Therefore it creates a surge in currency transaction volume.
For example, during the Sydney stock exchange market time, all the Australian traders would buy and sell shares, stocks, indices, commodities with Australian dollars (AUD). Thus AUD currency will be highly volatile, liquid. Therefore trading AUDUSD, AUDCAD, AUDJPY during this period is a smart choice.
Same way for the London stock exchange trading period, GBP (pound sterlings) stays most active. Below is the list of different forex trading sessions & its most preferable currency pairs to trade during that period:
|Forex Session Name||Timing||Ideal Currency Pairs To Trade|
|Asian session||0:00 – 10:00 GMT||
|European session||8:00 – 16:00 GMT||
|US session||13:00 – 23:00 GMT||
|Australian session||22:00 – 7:00 GMT||
Forex sessional overlap
As listed above, for 24 hours on weekdays, many stock market sessions get opened and closed, one session overlaps with another one. Those overlapping trading sessions are high volatile market time as the cross border, multiple countries transact at the same time.
The most common trading session overlap is “London session and US session overlap”. In this timing, you can trade all major currency pairs. This overlapping happens between 13:00 GMT to 16:00 GMT.
Another sessional overlapping is the Asian session vs European session overlap. It occurs from 8:00 GMT to 10:00 GMT on each trading day.
Notice this overlapping time are generally last only for 2-3 hours. Usually, if you do not get any time to trade forex in the whole day, then you can trade during these times. Smart forex traders set up their trading schedules based on these timings.
Forex sessional gap (dead zones):
Just like the sessional overlap, there are also some sessional gaps when the market has low volatility and liquidity. Because during these times no major stock market stays open, thus low volume on the transaction.
Generally, most traders do not make any trades during those timing. It occurs usually at 23:00 or one hours before each trading session starts time, which also one hour before the previous trading session end time. Market mostly stays flat or in range during this period.
Timing market for best trades:
Based on our research, we have observed that most of the intraday or daily tops & bottoms or highs and lows get formed during the start of the major forex sessions. Read more from our day trading strategies.
Here you will see the five major currency pairs market movement in pips during different forex trading sessions.
|Currency Pair||Tokyo Session||London Session||New York Session|
|AUDUSD||30 pips||55 pips||64 pips|
|EURUSD||20 pips||66 pips||25 pips|
|GBPUSD||26 pips||52 pips||50 pips|
|USDCAD||25 pips||56 pips||44 pips|
|USDJPY||75 pips||27 pips||76 pips|
* Based on Jan 2018 Records
New release data:
All major economic data get released during these major trading sessions. For example, if there is any important news about the US market. Then it will get released during the US business hour. Therefore this is another reason for the volatility push of a specific currency.
You can try the Forex market hour calculator to know when is the correct time for trading. Its auto-adjusted with the local time.