Forex Market Hours and Sessions in 2020
Knowing Forex market hours is essential for a new trader.
You need to know when the Forex market opens and closes as well as the four global sessions.
By the time you finish reading this post, you will have a complete understanding of the Forex hours and sessions.
Forex Trading Hours
At this point you may be asking, if Forex is indeed a 24 hour market, why can I only trade Monday through Friday?
This brings me to a very common misconception in the Forex world – the idea that the market closes on weekends. In truth, the Forex market never closes. The only thing that closes is the ability for retail traders to participate.
What is a retail trader, you ask? Put simply, a retail trader is someone who buys or sells for their personal account, and not for another company or organization. So unless you are an institutional trader, you are a retail trader.
So although the ability for retail traders to participate is halted over the weekends, the Forex market as a currency exchange is alive and well.
This is what creates so called “gaps” when the market opens at the beginning of the week. It’s simply the result of your broker updating their charts from last week’s price action to the current price action at the start of the trading week.
We’ll get into gaps in a later lesson. For now, just know that the market never closes due to the needs of international trade, as well as the needs of central banks and global industries to conduct business.
So what time does the Forex market open?
The Forex market opens for retail trade every Sunday at 5 pm EST. It then closes each Friday at 5 pm EST.
There are various sessions that occur around the world which make up the Forex hours each day. Let’s take a look at those market sessions.
Forex Market Sessions
Because this is a 24 hour market, there is always at least one active trading session. There are even times when these sessions overlap.
The easiest way to visualize how these Forex market sessions operate is to imagine the earth relative to the sun. Wherever the sun is shining, the Forex market is open. This is of course a simplified way of thinking about it, but it does help to visualize the Forex hours in this way.
The Forex market hours chart below shows the four sessions in Greenwich Mean Time (GMT).
Here is a breakdown of the chart above in Eastern Standard Time:
- New York opens at 8:00 am to 5:00 pm EST
- Tokyo opens at 7:00 pm to 4:00 am EST
- Sydney opens at 5:00 pm to 2:00 am EST
- London opens at 3:00 am to 12:00 noon EST
As you can see from the chart above, there are several market sessions which overlap. The most obvious, and the most heavily traded, is the London / New York overlap. This is when liquidity is at its highest as many Forex market participants prefer trading during this time.
What Are the Best Forex Trading Hours?
One of the most common questions among Forex traders is, when is the best time to trade? Like most things, it’s all relative to your trading style as well as your lifestyle. Obviously if you’re located in a part of the world where the London / New York session overlap occurs at 3 AM, this may not be the most advantageous for your lifestyle.
The great thing about trading price action on the higher time frames is that Forex hours and market sessions don’t particularly matter. For example, if you spot a bullish pin bar on the daily time frame, you would simply set your pending order and let the market decide what becomes of it. It doesn’t particularly matter which session triggers the order.
See my lesson on the best time frame for trading Forex for more information.
The Advantages and Disadvantages of a 24-Hour Market
Like most things, there are advantages and disadvantages to the Forex market being a 24-hour market.
I will note, however, that the disadvantages typically reign true with those just starting out. In fact, I feel confident in saying that the disadvantages below are what make the Forex market one of the more challenging markets to conquer as a beginning trader.
Advantages of a 24-Hour Market:
- It offers the ability to trade at any time of the day regardless of where you live
- There are very few gaps from day to day, unlike the stock market
- More liquidity even during slower sessions
Disadvantages of a 24-Hour Market:
- The 24 hour nature of the Forex market can lead to traders over-thinking their positions
- The Forex market requires more self-discipline to take breaks away from trading due to the market never closing
The fact that the Forex market never sleeps means it’s easy to overtrade.
Instead of trading for a few hours each day, you may find yourself waking up early or staying up late just to place trades.
That’s a bad idea!
Furthermore, many new traders find it hard to take breaks from the market.
They feel the need to monitor their positions 24-hours a day.
This is one of the more destructive habits of new traders and is enabled by the fact that the Forex market never closes.
The good news is that these disadvantages are easily cured by a well-structured Forex trading course, discipline and no small amount of practice.
I hope this lesson has shed some light on the subject of Forex market hours as well as the various market sessions that make up a 24 hour period.
Here are a few key points to keep in mind:
- The Forex market is a 24 hour market that technically never closes
- Retail traders are those who trade for their personal account
- Retail trading hours in the Forex market are between 5pm EST on Sunday until 5pm EST Friday
- There are 4 market sessions that make up the Forex market hours – London, New York, Sydney and Tokyo