How Forex Prices Move During the Different Global Sessions
Cory Mitchell, CMT
The forex market is open 24 hours a day, from 5 pm EST on Sunday, to 5 pm EST on Friday. 24-hour trading is possible because there are always countries open for business at all times throughout the day.
On Sunday evening, Asia and Australia open for business, then the European markets open, then the North and South American markets open. Throughout the 24-hour period, there is always a major financial center open. To name a few: Sydney, Tokyo, London, New York/Toronto. When you go to trade, no matter what time of day it is, someone is willing to transact with you, because banks, brokers, and businesses are open for business somewhere.
The Forex Trading Sessions
While there are many countries and cities open for business at any given time, many traders refer to the London, New York, Sydney, and Tokyo sessions because they are major financial centers that all link up to form a continuous 24-hour trading day.
Forex sessions in EST
Forex sessions GMT
How Forex Prices Move During the Different Sessions
As a general guideline, currencies tend to move the most during the London and New York session. This is because all of Europe is trading and then all of North and South America are trading. The "overlap" period between London and New York tends to see the most price action.
Mataf.net provides excellent tools for seeing how much pairs move at different times of the day (and day of the week).
The tools adjust to the timezone on your computer. Here is the graph of the EURUSD in Eastern Time (EST).
While the number of pips that a currency moves in a day will change over time, the highest and lowest points tend to stay the same. For example, we can see that the activity in the EURUSD picks up at 0200. That is one hour before London opens at 0300. A number of major cities open up before London, including Germany at 0200.
There is the highest amount of movement typically when London and New York are both open, from 0800 to 1100. Then action tapers a bit heading into the US close.
If you want to know how much a currency pair typically moves during any hour of the day, check out https://www.mataf.net/en/forex/tools/volatility. Click on a currency pair to see how it moves by hour of day, by day of week, and how current volatility/daily movement compares to historical movement.
Using the Volatility Data
Day traders may find this hourly data useful for setting profit targets, for example.
If you know that a pair typically moves 30 pips during a certain hour, you can use that to judge how long it may take to exit a trade, or set a profit target within that. Having the data helps control our expectations and grounds them in reality. It can also help us see where there may be an opportunity to expand our profits.
If we are taking 2 trades in an hour for 5 pips of profit each, but the pair is moving 30 pips in that hour, maybe we could explore ways to extract a bit more of that profit potential.
It is just data, how we use it (or don't use it) to our advantage is up to us.
Cory Mitchell, CMT
Disclaimer: Nothing in this article is personal investment advice, or advice to buy or sell anything. Trading is risky and can result in substantial losses, even more than deposited if using leverage.