Currency Trading Hours

One of the benefits of currency trading is that the market is open 24 hours a day. This allows individuals who want to trade in currencies to trade during normal business hours, after work or even in the middle of the night. During currency trading hours there are times when the prices are consistently volatile and periods when it is muted. Also, different currency pairs exhibit varying activity over certain times of the trading day due to the general demographic of those market traders who are on line at the time.

Currency trading hours are considered a 24 hour market which offers an advantage for many individual traders because it guarantees liquidity and the opportunity to trade at any time during the day or night, it also has its drawbacks. A trader can only monitor a position for so long. There will be times when an opportunity is missed or even worse, when a jump in volatility will lead the market to move against an established trade when the trader isn't around. To minimize this risk, a trader need to know when the currency market is typically volatile and decide what times are best for their trading strategy and style.

Currency trading hours is separated into three sessions during which market activity peaks: the Asian, European and North American sessions. These three sessions are also referred to as the Tokyo, London and New York sessions. These three cities represent the major financial centers for each of the regions. The currency markets are most active when these three sessions are conducting business.

The Asian (Tokyo) market is live from midnight to 6:00 a.m. Greenwich Mean Time (GMT). China, Australia, New Zealand and Russia are also present in the currency market during this time. Because of the range of these different markets, the beginning and the end of the Asian session are stretched beyond the standard Tokyo hours. Allowing for all these different currency markets, Asian hours are often considered to run between 11:00 p.m. and 8:00 a.m. GMT.

Just before the Asian currency trading hours come to a close, the European (London) session opens to keep the currency market active. Official business hours in London run between 7:30 a.m. and 3:30 p.m. GMT. However, currency trading hours for this session are expanded because of the other capital markets including Germany and France. The European hours are typically seen as running from 7:00 a.m. to 4:00 p.m. GMT.

By the time the North American (New York) session opens, the Asian markets have already been closed for several hours. Canada, Mexico and some countries in South America also trade during the North American session. It shouldn't be a surprise that activity in New York City marks the high in volatility and participation for this session. The North American currency trading hours unofficially begin at noon GMT. With a considerable gap between the close of the North American currency markets and open of the Asian session, a lull in liquidity sets the close of New York market trading at 8:00 p.m. GMT as the North American Session close.