Major Forex trading sessions from around the world

– Review by James Stanley, November 24, 2021

There are three major Forex trading sessions that consist of 24-hour market: London Session, US Session and Asian Session. Everyone a large geographic market center can exhibit much unique traits and trends that can allow merchants for effective execution of strategies at any time.

Although the forex market is the most liquid of all asset classes, there are periods when volatility remains constant and others are subdued. Understanding these different times of forex sessions can improve the reliability of your forex trading strategy.

In this article, we will look at each of these currency market sessions, including their key characteristics – forex time zones and how they affect trading.

What are the main forex trading sessions?

Usually the forex market is divided into three market sessions:

The currency market is seen as very functional / dynamic during these trading sessions as large banks, institutions and retail traders operate. A note of the specific time of each trading session will help forex traders in developing their trading strategies based on this data.

Asian trading session

Tokyo is the first forex session to open, and many major participants are using the momentum of trading in Asia to develop their strategies and use as an indicator of future market dynamics. About 6% of world currency transactions are carried out in the Asian trading session.

European Trade Session

London is the largest and most important forex trading session in the world, with a market share of around 34% daily forex volume. Most of the world’s largest banks keep their dealerships in London because of market share. The large number of participants in the London forex market and the high cost of transactions makes the London session bigger unstable than the other two forex sessions.

The pressure of liquidity coming from London could increase significantly “average hourly traffic” major currency pairs such as EUR / USD. The chart below illustrates these statistics based on the time of day – note the increase that occurs when the European trading session starts at 03:00 ET (08:00 GMT).

Source: DailyFX Traits of successful traders research (2010-2012)

US trading session

The second largest trading market, New York, handles about 16% of the world’s foreign exchange transactions. Many of the transactions in New York take place during the overlap of the US and Europe, with transactions slowing as liquidity dries up and European traders exit the Forex market.

Pay attention to green dot on the previous chart around 08:00 ET (13:00 GMT), when the US goes online and when the market is overlapping Europe / US, the average movement increases even more until London falls into offline mode (denoted red dot) around 12:00 ET (17:00 GMT).

When is the best time to trade?

DailyFX data showed over the past 10 years, European currency pairs have shown greater success in trading between 19:00 and 11:00 GMT. As mentioned earlier, liquidity at this time is relatively low, as the session in the US has little effect. This low liquidity allows the use of range-related trading strategies, with wider use indicators such as RSI.

Day traders who love ranges, that is buying with support and selling with resistance consideration should be given to trading European currencies during the late US session to the Asian session (19:00–07:00GMT).

Day traders who love breakthroughs and trends should consider trade when Europe comes online, when Europe goes offline (08:00–17:00GMT). Second, trade in Asian currencies (AUDor NZD) during the Asian session there may also be some breakthroughs as it is an active working day for these home currencies.

If you try to trade on the breakdown of European currencies during the Asian session, you will probably find it disappointing, as these markets tend not to move as much because it ‘day off’ for these currencies.

For more information on forex trading sessions read «If this is the best time of day to trade forex?”

Help pages and guides to improve your forex trading experience

• If you are just starting your trading journey, it is very important to understand the basics of foreign exchange trading in our free New in Forex trade guide.
• We also offer a range trade directories supplement your knowledge and develop forex strategies.
• Our research team analyzed more than 30 million live transactions to detect traits of successful traders. Include these traits to gain an edge in the markets.
• Traders often turn to the mood of retail customers when trading in popular currency markets. DailyFX provides such data based IG customer sentiment.