The Forex Market Trading Sessions

Forex remains open 24 hours a day from Monday to Friday but not all sessions are created equal. We can break the 24 hours down into four main trading sessions. There will however be times when the market is hardly moving at all so this is important knowledge too. Let’s first look at these main Forex Trading sessions and then we can explore the difference and overlaps between each. Don’t forget that we also need to keep daylight savings time (DST) in mind.

DST On – Summer Time

DST Off – Winter Time

To confuse things further it’s worth noting that not all countries move to and from DST together. During these transitions, you will only be left scratching your head for a week or so though. Just keep in mind that each trading session will open and close based on its local business hours and that Sydney has opposite seasons from the rest (This is why you will notice a 2 hours difference for Sydney in the tables above).

Differences Between the Trading Sessions

Not all of the forex trading sessions are created equal; the most volatile session giving out the largest movements is in London. This shouldn’t come as a surprise since the largest percentage of all trading each day takes place there. The London session has the largest pip moments on average for all currency pairs traded. It is definitely a favorite for most traders. Second place goes to New York which has slightly less movement than the London session but slightly more than Tokyo and Sydney combined. In the last place, you can just look at Tokyo and Sydney as one session and it provides less movement than New York. During this slower session though, the AUD and the JPY currency pairs still move close to what they do during New Yor.k This makes them prime candidates if you wanted to trade that session.

Forex Trading Session Overlaps

As the 24 hours in a day roll around there are some overlaps in these sessions. The main and most notable overlap is London-New York where you can enjoy the trading volumes of both for several hours. The other overlap is much smaller and is Tokyo-London where, for just an hour, you can make the most of the trading volumes from both sessions. With the growth of Germany as the European powerhouse, you will also notice some good volumes added to the market 1 hour before London opens. This puts another hour extension on the overlap and has proven to have some great trades even before London opens.

Here is an image to give you a visual on the sessions and overlaps. During DST transitions things will change slightly but you will be able to get a good idea about what was just discussed. If you were to consider Germany then you could just extend the green London session bar back 1 hour.