Global Market Hours
Assets can be traded on the various global markets, each of which is open for a different period in a 24 hour cycle.
The time zone governing each market will impact its responses to international news. For example, the Asian markets are closed during American afternoon hours. This means that the Asian markets cannot react to a potentially market moving event that occurs during US trading hours until they reopen. By that point, later news items may have taken precedence over the original event or neutralized it, so that it will have less impact on the Asian market than it had on the American market.
Being aware of which exchanges are open at the time you are assessing a news item for its market significance is critical to your trading strategy.
Global Foreign Exchange Trading Hours (GMT)
Top Trading Hours
Overlaps in foreign exchange market hours occur at the following times GMT:
Sydney and Tokyo: from 00:00 to 07:00 (GMT)
New York and London: from 13.00 to 17:00 (GMT)
London and Tokyo markets overlap for one hour only, from 08:00 to 09:00 (GMT)
Peak opportunities arise when you trade currency pairs of two markets that are open concurrently.
For example, the European and American markets that trade EUR/USD, GBP/USD, or USD/CHF are simultaneously active from 13:00 to 17:00 (GMT). These are the optimal hours for trading these currencies, since over this period the largest volume of trades are being placed, creating greater market movement and offering more chances for you to take advantage of market fluctuations. So too, from 00:00 to 03:00 (GMT), the Asian and Australian markets are both simultaneously active, creating an equally attractive trading opportunity.
Another peak trading window is the period from 06:00 to 08:00 (GMT), when the European and Asian markets overlap, as the former opens, while the latter closes. However, by 10:00 (GMT) the Asian markets have closed while the European market is experiencing peak trading.
Trough trading hours occur when there is little or no overlap between markets. For example, the US market closes at 22:00 (GMT) and only then does the Australian market open. From 21:00 to 23:00 (GMT), the European and Asian markets are closed and there is no overlap in global trading. Therefore, trading volume is low and opportunities for exploiting market movement are limited.
So, while you can trade world markets 24 hours a day, taking advantage of certain peak trading hours will enable you to better exploit the full potential of global financial markets.