If you’re starting with forex trading, knowing when to trade is just as crucial as knowing what to trade. Unlike the stock market, which follows a strict schedule, forex operates 24 hours a day, Monday to Friday. But not all hours are created equal. Some hours offer more opportunities than others.

Imagine the market as a global relay, flowing from one financial hub to the next. As the earth spins, the trading baton gets passed from one major financial hub to the next. It starts in Sydney, moves to Tokyo, then heads to London, and finally lands in New York. Each session brings distinct market dynamics.

‍

The four main forex trading sessions:

Sydney session (9 pm–6 am (GMT))

This is where the action begins! The Australian and New Zealand dollars take the spotlight. It’s usually a quieter session, like the calm before the storm.

Tokyo session (12 am–9 am (GMT))

The Asian markets wake up, and the Japanese yen takes center stage. This session moves at a moderate pace, allowing traders to identify trends before the more intense London and New York sessions kick in.

London session (7 am–4 pm (GMT))

London brings a rush of activity, with the euro and British pound making strong moves. This is prime time for forex trading: High volatility, big opportunities and plenty of action.

New York session (12 pm–9 pm (GMT))

The US dollar takes the spotlight, and the market becomes even more intense, especially when it overlaps with London. This session offers high volatility and trading volume.

‍

The magic of overlapping sessions

Some of the best trading opportunities happen when two sessions overlap, creating a surge in trading volume and volatility. Here’s where these periods often generate heightened volatility and liquidity.

• London & New York overlap (12 pm–4 pm (GMT)):

The busiest and most traded session, especially for pairs like GBP/USD. Big players are active, and price movements can be explosive.

• Tokyo & London overlap (7 am–9 am (GMT)):

Less volatile than the London/New York overlap but still offers decent trading opportunities.

Tip: These sessions follow GMT, so adjust them to your time zone. There are plenty of online tools to help you sync up with the market.

‍

Why trading hours make a difference

• Find the best times to trade: Looking for volatility? Trade during the London or New York sessions. Prefer a calmer pace? Try Sydney or Tokyo.

• Understand market behavior: Different sessions have different characteristics. The Tokyo session is often more predictable, while the New York session can be more volatile and dynamic.

• ‍Plan your strategies: Scalping might work best in Tokyo, while trend-following strategies could shine during the London session.

‍

Now that you know the rhythm of the forex market, you can plan your trading sessions for the best opportunities. Remember, it’s not just about when you trade.

Success isn't just about timing. It's also about executing your plan with discipline. Choose the sessions that match your style, manage your risk, and always trade with a plan.

Log in to Deriv Academy to sharpen your trading skills today!

‍