Technically speaking, if you exchange U. Dollars to get some British Pound for pocket money at an Airport Foreign Exchange Kiosk after arriving in London, in the middle of the night, it would be also considered as a foreign exchange trade.

However, as you can guess by now, large billion-dollar, cross-border, transactions do not happen at 3 a. at the parking lot of the Heathrow Airport.

These market-moving transactions happen among large banks during their respective banking hours. Moreover, not all branches of a certain big bank will do these large-scale cross-border transactions. For example, a small branch of the Bank of America in Louisville, Kentucky. However, its downtown Manhattan branch in New York will certainly engage in large-scale foreign exchange deals. Similarly, a branch of the Swiss multinational investment bank, UBS Group AG, in Bangkok will have a lower transaction volume in the Forex market compared to its branch located in a major Asian financial hub like Singapore.

Hence, banking hours in the time zone of major financial centers like Tokyo in Japan, Singapore City in Singapore, Frankfurt in Germany, London in the United Kingdom, and New York in the United States generate the bulk of the trading volume in the Forex market. Therefore, liquidity and volatility are usually higher when markets are open in these time zones. Besides banks engaged in commercial cross-border currency transactions, institutional investors and hedge funds speculating in the international stock exchanges also generate a high volume of foreign exchange transactions.

Hedge funds with international exposure often buy and sell a large number of stocks across the globe to diversify their portfolios. Coincidentally, some of the major forex exchange hubs also host the major stock exchanges. For example, the NASDAQ and the New York Stock Exchange are located in, you guessed it right, in New York; The London Stock Exchange is located in London, and the Tokyo Shoken Torihikijo is based in Tokyo.

So, cross-border investments that require moving funds from one end of the globe to another generally contributes to a higher level of trading volume in the global foreign exchange market. Furthermore, when banks and stock exchanges in more than one major financial centers are open simultaneously, the trading volume and liquidity go up substantially.

This is why the beginning of the New York trading session has usually generated the bulk of the trading opportunities for short-term traders because it opens when the London trading session is also open across the Atlantic. Hence, if you overlay the trading volatility in a forex market hours chart, you can see that it spikes up when trading begins in the financial center located next in the time zone.

And so Overlapping hours of the London trading session and the New York trading session is the best time to trade forex, since the market is most active.

If you are a swing trader or a trend trader who likes to keep positions open overnight or several days at a time, then paying attention to the forex market hours chart in figure 2 may not be that important.

However, most Forex traders are day traders and different trading sessions based on the time zone and geographic location of the financial centers around the world will have a substantial impact on the bottom line. 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.

Knowing when to enter and exit the market based on active Forex market hour can have an immensely positive impact on your profitability and aid in building the confidence you need to succeed in this agile market environment.

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. Price gaps are the areas on a price chart that represents a missing price data in a chart. While a lot of brokers also show price gaps in line charts, it is best illustrated in a bar or candlestick chart. When a currency pair sharply goes up or down with no transaction in between, it is represented in a price gap.

While most brokers suspend trading during the weekend, the fact is that economic news and geopolitical events still occur on Saturdays and Sundays. As a result, the valuation of different currency pairs can change after the brokers suspend trading on Friday. When the market re-opens on Monday morning, at a.

in Sydney time, you will often see that there is a huge gap between the closing price of Friday and the opening price on Monday. For example, let's say a hostile country like Iran might have announced to test a nuclear weapon after the market closed on Friday. As a result, the value of the U. Dollar may drop during the weekend.

Trading price gaps on Mondays can be very profitable as most often gaps are filled before the actual trend takes place, be it the continuation of the trend in the direction of the price gap or a complete reversal. While the uptrend continued throughout Monday, a bearish retracement started on Tuesday, July 2, , and the gap was filled before the uptrend resumed. Hence, often major trends start and end during the London Forex market hours. If you are a Forex trader who applies breakout trading strategies, it makes perfect sense to look for breakout trades at the opening hours of the London market open.

To do so, of course, you need to trade in smaller time frames like the 5-minute or the minute charts. In terms of the actual trading strategy, trading during the London market opening hour is no different than trading any other time of the day. However, given the significant increase in trading volume at this time, it makes breakout trading much more lucrative. What about your Forex broker? Your broker will offer a trading platform with a certain time frame the time frame will depend on the country where broker operates.

If you haven't chosen a Forex broker yet, we recommend Forex brokers comparison to aid your search. We have made it easy for everyone to monitor Forex trading hours sessions while being anywhere in the world:.

Download Free Forex Market Hours Monitor v2. This is a simple program aligned to Eastern Standard Time. Time zone option is added for most of North American and European countries. The New York session time is from EST during spring or EST during winter. The official hours of the London Forex Session run from AM ET to PM ET.

New York and London have different time zones, but they overlap each other once every day, creating the most liquid session. This happens between AM and PM ET. The US session can very well trade like its European counterpart during this overlap. The opening hours of the New York session witness more volatility than the other half of the day. You can employ different methods to capitalize on these different volatility levels.

The US and the London Forex sessions are the big guns in the world of Forex trading. When they overlap, they create several opportunities.

During their shared four hours, the two markets witness fast and large movements because high liquidity is present in the market. The most successful strategy that a trader can employ during this overlap is the break-out strategy.

This strategy allows you to reap the maximum benefits of this time period. As soon as the London session is over, the volatility decreases drastically. Traders spend fewer hours in the market that ultimately decreases the liquidity as well.

Along with decreased hours registered by the traders, the moves also become smaller. Even though the other half of the NY session is not as lively and volatile as the first half, there are still ways to profit.

All you need to do is to change your strategy. Instead of using the break-out strategy, move ahead with strategies like the range trading strategy. With a strategy like this one, you can use the resistance and support levels to your advantage.

Strategies like range trading are more successful in the other half of the trading day because as the volatility lowers, it becomes tough to break the support and resistance levels.

One of the most liquid trading sessions in the Forex market is the New York session. Its high liquidity makes it popular amongst traders across the world. The most liquid session of the day happens when the US session overlaps the London Forex session. The official hours of the New York Forex Session are from AM EST to PM EST.

In GMT, the New York forex session runs from noon to 9 PM GMT. New York session time is from GMT during spring or GMT during winter.

The New York session time is from EST during spring or EST during winter. The official hours of the London Forex Session run from AM ET to PM ET. New York and London have different time zones, but they overlap each other once every day, creating the most liquid session.

This happens between AM and PM ET. The US session can very well trade like its European counterpart during this overlap. The opening hours of the New York session witness more volatility than the other half of the day. You can employ different methods to capitalize on these different volatility levels. The US and the London Forex sessions are the big guns in the world of Forex trading.

When they overlap, they create several opportunities. During their shared four hours, the two markets witness fast and large movements because high liquidity is present in the market. The most successful strategy that a trader can employ during this overlap is the break-out strategy.

This strategy allows you to reap the maximum benefits of this time period. As soon as the London session is over, the volatility decreases drastically. Traders spend fewer hours in the market that ultimately decreases the liquidity as well.

Along with decreased hours registered by the traders, the moves also become smaller. Even though the other half of the NY session is not as lively and volatile as the first half, there are still ways to profit. All you need to do is to change your strategy.

Instead of using the break-out strategy, move ahead with strategies like the range trading strategy. With a strategy like this one, you can use the resistance and support levels to your advantage. Strategies like range trading are more successful in the other half of the trading day because as the volatility lowers, it becomes tough to break the support and resistance levels.

Because of this, range trading is more likely to benefit you. There are several pairs that you can successfully trade during the NY session. Given that the NY session and the London session overlap for four hours, most major currency pairs have USD, EUR, and GBP. The best pairs to trade during the New York Session because of excellent volatility and trend following direction are:. These pairs are liquid, to begin with, but they become more liquid during the overlap.

Every Forex trading session comes with its share of unique characteristics. The market begins with the NY session, which is chased by the London session. Finally, the London session is tracked by the Asia session. Whenever the market has high liquidity, trading will be lower because of the reduced spreads. Since the overlap witnesses a combination of high volatility and liquidity, traders find plenty of opportunities to make profits.

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