We think everyone who has ever wondered about trading in the financial markets has come across such a question as the schedule of Forex trading sessions.
During standard training courses, which can be easily found on the Internet or take place in the offices of brokerage companies, very little attention is paid to this important issue. But it is precisely from such a parameter that the ability to earn on the stock exchange directly depends.
If the trading session is closed, the market does not work, and therefore there is no opportunity to open deals and earn money. Therefore it is crucial for a trader to know the exact schedule. Luckily there is such a solution as the Forex market time converter.
However, in order to use this tool correctly, we should find out all the nuances of the exchange timing. So first things first!
Stock market hours
The stock market is different in every country, or rather, in every part of the world, there is the largest stock exchange, and each of them has its own working hours.
Below we have given a list of the largest stock exchanges in different parts of the world and indicated the time of work according to the generally accepted universal time UTC/GMT 0:
Thus, it turns out that work on the stock exchange is carried out during the daytime, and at night the exchange does not work. And suppose you are, for example, in the region of the Asian session. In that case, there is simply no opportunity to make transactions with financial instruments during the daytime on the American Stock Exchange NYSE. We have to be content with the capabilities of the local TSE exchange.
Forex trading hours
The main difference between the Forex market and the stock exchange is decentralization. This means that in order to gain access to trading operations, it is not necessary to be tied to a specific place and time. Unlike the stock exchange, Forex operates around the clock.
Why? Because its work is provided by banks around the world and in all time zones. Round-the-clock work of the currency market is provided by 4 trading sessions replacing each other:
Pacific trading session (21:00 – 05:00 UTC/GMT 0).
The work of the Pacific trading session is supported by the work of the two largest exchanges in this time zone: NZX WELLINGTON and ASX SYDNEY. The Pacific trading session starts at 21:00 and closes at 05:00.
Asian trading session (24:00 – 09:00 UTC/GMT 0).
The Asian trading session implies the work of HKE HONG KONG, SSE SHANGHAI, and TSE TOKYO. The Asian trading session starts at 24:00 and closes at 09:00.
European trading session (07:00 – 16:30 UTC/GMT 0).
The work of the European trading session is supported by the work of the four largest exchanges in this time zone at once: LSE LONDON, SIX ZURICH, FWB FRANKFURT, and JSE JOHANNESBURG. The European trading session starts at 07:00 and closes at 16:30.
American trading session (14:30 – 21:00 UTC/GMT 0).
The American trading session features the following exchanges: CHX CHICAGO, NYSE NEW YORK, and TSX TORONTO. During the American session, the largest stock exchange in the world, the NYSE (New York Stock Exchange), operates. The American trading session starts at 14:30 and closes at 210.
It is worth considering one very important remark. The time of opening and closing of trading sessions is taken into account according to the current “winter time.” In the case of daylight saving time, the session time will shift by one hour.
How different timing impacts trading
Trading sessions are arranged in such a way that one replaces the other and even overlap each other. Thus, the round-the-clock operation of the Forex market is ensured. However, such a schedule is the cause of volatility.
Such a parameter as volatility depends on the work of a particular trading session.
Volatility is the number of price fluctuations per unit of time. During each trading session, the volatility parameters are different. Those parts of the world where the largest number of bidders live and the largest exchanges are located show the highest volatility parameters.
Also, the volatility of a particular instrument depends on the interest in it in the region. For example, trading AUD (Australian dollar) is most active during the Pacific trading session. Countries in which trading takes place at this time, such as New Zealand, are the most active participants.
The price gap between the closing price of the previous period and the opening price of a new one occurs during times of major turmoil. On the stock exchange, a price gap associated with a break in trading is generally quite common and happens almost before every opening.
When is FX closed?
However, just because Forex is open 24/7 doesn’t mean it never closes. It happens on the weekend. Standard European weekends are Saturday and Sunday. These days the market is closed, and trading is not possible.
On Friday at 23:59, the market closes, and on Monday at 00:01, Forex trading starts.
What is the best time to trade on FX?
In conclusion, we want to say that it is very important to take into account the quotation time of instruments and the volatility parameter in a trading strategy.
The European region is in the best position in this regard. It covers the work of the two most active trading sessions and, in fact, has the opportunity to observe high volatility from morning to evening.
However, high volatility is not always a trader’s ally. The higher the volatility, the higher the risk. Therefore, novice traders should avoid this period.