As we have already established, forex market times are undefined by the market, and therefore as such we have to create our own synthetic market hours, using the four hour and eight hour charts. Let’s start by looking at the forex market trading hours within a 24 hour period, and how the liquidity and market depth varies throughout period.

forex market hours liquidity chart

Forex trading hours liquidity chart

The chart shown above is based on a twenty for hour period and is color coded to indicate at which points the forex markets are likely to be the most liquid and with the greatest trading volumes as a result. However as we will see shortly, this is not the whole story, but let me briefly explaining how the forex market hours are broken down on the above chart, which was kindly provided by GFT forex.

Forex market times explained

If we move from right to left, the first forex market to open at midnight GMT is Sydney, which trades alone until it is joined by the first major Asian centre Japan, along with Hong Kong. These markets then trade together until 7am GMT when the European forex market opens, at which point we have three major global markets open, and deep liquidity as a result, but an hour later the Asian markets close, leaving the UK and European markets to trade together until the open of the New York markets at 1pm GMT. At this stage we have three major markets trading once again for a two hour period, before Europe closes at 3pm GMT followed by the UK at 4pm GMT, leaving the US market to trade on until the NY close at 8pm GMT with the West Coast closing between 9 and 11 GMT, before the cycle repeats itself once again with the Sydney open.

Many forex traders fail to appreciate the importance of these trading times or indeed the significance of the various hours during when the markets are extremely thin, with low trading volumes, and lacking in liquidity. In addition the three major money centres of London, New York and Tokyo, have very different trading profiles and characteristics, which in turn affect the way the forex markets behave during the forex market hours that these centres are open. So let’s look at each of these in detail and how they behave during the trading session and what forex signals we can use as a result.