New York: opens at 1 p.m. GMT and closes at 10 p.m. GMTSydney: opens at 10 p.m. GMT and closes at 7 a.m. GMTTokyo: opens at midnight GMT and closes at 9 a.m. GMTLondon: opens at 8 a.m. GMT and closes at 4 p.m. GMT
How Does the Forex Market Stay Open 24 Hours?
To make it easier to understand when exchanges are open, you should view the opening and closing times at each location worldwide with a common base reference time. For instance, the information you’re reading here is referenced in GMT.
Why You Should Use GMT When Trading Forex
Other websites based in the United States might use their common base reference time as Eastern Time (ET). This isn’t wrong, but it can become confusing. Using a time that is standard worldwide makes it easier for you to know when you can trade. Another source of trading confusion is that ET changes with Daylight Savings Time (DST). Since the agreed-upon reference time for forex worldwide is GMT (which has no DST), a New York trader who chooses to reference Eastern time rather than GMT must remember the trading hours shift.
24-Hours-a-Day Trading Explained
The forex market is open at each location for at least eight hours. When you look for information on the markets, you’ll see that they are often referred to as being open “24 hours a day.” This is true—or at least “true-ish.” While the explanation isn’t complicated, it might feel a little strange. There are two factors to become familiar with. First, if it’s midnight in New York, and the New York forex market is closed, it’s the middle of the trading day somewhere else, such as Tokyo, for instance. Second, keep in mind that forex, as a worldwide market, is entirely virtual. There’s no trading pit anywhere. When you enter a midnight forex trade on your laptop in New York, the trade is executed in Tokyo or in another of the several trading centers worldwide that are open when you initiate the trade. You can trade anytime you want, although you should note that you’ll get the narrowest spreads (the broker’s profit margin) when the maximum number of trading centers are open. To be more precise, when the trading volume for your currency trade is greatest, you’ll have the lowest broker transaction fees.
7 Days a Week Explained
Yet another source of confusion has to do with how many days a week the forex is open. Some websites may declare without further explanation that the forex is “open 24 hours a day, seven days a week,” while others might note that the forex market is open “five days a week.” Both statements are true if you put them in context. They contradict each other, because trading centers are only open for eight hours, but you can trade 24 hours a day. Since the exchanges are in different time zones, there are hours and days in which they are open that overlap. So, it is true that while trading centers keep five-day work weeks, somewhere in the world, another trading center is open when that trading center is closed. This is the happy result (for traders) of how the day of the week shifts forward or back as you cross the international dateline.
What It Means for Individual Traders
In short, you can forex trade anytime you want. Since you don’t have to be present in a trading pit or speak with a broker to make trades, you can trade when it’s best for you. Your trade might execute halfway around the world, but it doesn’t matter, because a forex market is open somewhere. That’s the basic information you need—at least when it comes to trading times. Remember that you’ll get the best trading spreads when the volume is peaking. Forex trading peaks when the greatest number of major trading markets are open. On that note, there are never more than two major markets open at any given moment. Sydney and Tokyo overlap, Tokyo and London overlap, and London and New York overlap. Most forex trades are conducted between the New York and London exchanges, so it is best to conduct trades between 1 p.m. and 4 p.m. GMT, when the hours for these two exchanges overlap. Tokyo and Sydney exchange hours overlap between 12 a.m. GTM and 7 a.m GTM, and Tokyo and London exchange hours overlap between 8 a.m. GTM and 9 a.m. GMT.
