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If you’re venturing into the world of forex trading from Australia, it’s crucial to understand the timings of the forex market.
The Australian Forex market is open Monday to Friday, 8am to 4pm AEST however you can trade forex 24 hours a day, five days a week.
Unlike stocks, forex markets do not rely on a central exchange, thus allowing you to trade forex via one of four global markets throughout the working week. For this reason, timing matters as each market operates in different hours and this impacts liquidity and volatility for the forex pairs in the market.
In this article, we’ll delve into the specifics of the forex market hours, focussing on the forex market opens in Australia.
We will also shed light on the best times to trade and other essential information for you as an aspiring forex trader aiming to choose the best forex broker.
Understanding the Forex market
Before we dive into the forex trading hours in Australia, let’s grasp the fundamentals of this dynamic market. Forex, short for foreign exchange, involves trading currencies from around the world.
Unlike stock markets, where you buy and sell shares of companies, in the forex market, you buy and sell currency pairs. The objective is to profit from the fluctuations in exchange rates between two currencies.
Major Forex Trading Centres
While the forex market is open 24/5, there are major trading centres worldwide that you need to be aware of, which are detailed below:
Trading Session: 8am – 4pm AEST
The Asia-Pacific region kicks off the forex trading day. Sydney is the first major trading centre to open and sets the tone for the day’s trading activities.
Trading Session: 9am – 6pm AEST
Following Sydney, Tokyo takes the reins. The overlap between the Sydney and Tokyo sessions often sees increased trading activity.
Trading Session: 6pm – 2am AEST
London is a global financial hub and one of the most significant forex trading centres. The London session often results in high liquidity.
Trading Session: 11pm – 8am AEST
The New York session marks the final major trading centre to open. It significantly overlaps with the London session, leading to robust trading volumes.
Forex Market Hours in Australia
Now that we have an overview of the major trading centres, let’s focus on the forex trading sessions in Australia:
Sydney Session (Asian Session)
The Sydney session starts at 8am AEST (Australian Eastern Standard Time) and concludes at 4 pm AEST.
The Sydney session primarily deals with the Australian and Asian markets. This session’s opening is often accompanied by increased volatility, making it an attractive time for day traders.
Overlapping Sessions
Sydney-Tokyo Overlap: Between 8am and 10am AEST, both the Sydney and Tokyo sessions are active. This overlap tends to be relatively active, offering opportunities for you to profit as a trader.
London to New York Overlap: Between 11pm and 3am AEST, London (or European session) and New York (or North America) overlap.
Daylight savings times
Daylight savings time (DST) is a practice where the clocks are set forward by one hour during the warmer months (or backwards during winter) to make better use of natural daylight.
While this practice is beneficial for many aspects of daily life, it can have implications for you as a forex trader.
Therefore the Forex session times vary with the seasons depending on where you are. Out of the four major Forex trading sessions which we identified above, only Japan keeps things straightforward all year round and does not change their clocks.
This means it’s important to closely monitor the time shifts, overlapping sessions, your trading strategies and economic events during periods of daylight savings.
Below are the Forex market opening times and closing times for each trading session in both local time zone and GMT.
Market holidays
While the forex market is open 24 hours a day, 5 days a week, public holidays (or bank holidays overseas) could affect the liquidity in a given market.
Bank holidays mean that the banks in the country where the holiday is taking place will be very unlikely to be trading in the forex market. And because banks are one of the biggest participants in the forex markets, if they are on holiday, then the volume of transactions is typically reduced.
When volume is reduced, this can have the effect of making the market static in the given currency pair involved. But this thinning can also cause voids and gaps, which can also have the effect of creating spikes in price action.
Because of these reasons, trading on public or bank holidays is to be treated cautiously and not generally advisable. Therefore, doing your research and learning when bank holidays occur around the world will better prepare you as a forex trader.
Best times to trade for Australians
As a trader in Australia, the best times to trade forex are during the overlapping sessions or opening hours. These periods usually offer higher liquidity and increased price movements, enhancing your chances of profitable trades.
Why Forex opening times matter
Understanding when these major forex trading centres open is vital for several reasons that can enhance your chance of making a profit.
1. Liquidity
The opening times of these centres correlate with increased liquidity (I.E. high trading volume). More participants in the market mean tighter spreads and better trading opportunities for you. Each forex trading session has different periods of liquidity so when you trade will impact the liquidity available.
2. Volatility
High volatility often accompanies the opening and overlap of these forex trading sessions. As a forex trader, you can capitalise on price swings during these times. It’s also important to note that trading during periods of high volatility can be more risky due to the less stable price action.
3. Trading strategy
Knowing when these centres open allows you to tailor your trading strategies accordingly. For example, if you are a day trader, you may focus on the London and New York overlap for optimal trading conditions.
4. Economic events
Many economic announcements and news releases coincide with the opening times of these centres. Traders can take advantage of these events by being active during the relevant sessions. For example, the interest rate announcement by the Reserve Bank of Australia on the first Tuesday of every month can greatly impact the forex markets.
Conclusion
In conclusion, understanding the forex market’s opening hours in Australia is vital for successful trading. The forex market operates 24/5, with sessions overlapping to create optimal trading opportunities. As an Australian trader, you can maximise your chances of success by strategically planning your trading activities during these overlapping sessions.
Can I trade forex 24/7 from Australia?
While the forex market operates 24/5, it’s essential to consider the most active trading hours for better results.
What are the major currency pairs to trade during the Australian forex market hours?
The Australian dollar currency pairs, AUD/USD and AUD/JPY (Japanese Yen) are popular choices during the Australian trading session.
Are there any risks associated with forex trading during the Sydney session?
Like any financial market, forex trading carries risks. However, the Sydney session’s volatility can present both opportunities and challenges for traders.
Do forex brokers in Australia offer support during all trading sessions?
Reputable forex brokers in Australia typically provide customer support throughout the forex market’s operational hours.
What other factors should I consider when trading forex in Australia?
Factors such as economic events, news releases, and technical analysis play a significant role in forex trading. Staying informed and adopting effective strategies is crucial for your success.
