Is There the Best Time to Trade Forex in the UK?Is There the Best Time to Trade Forex in the UK?
Grasping the nuances of forex market hours is essential for traders aiming to optimise their strategies. Operating continuously from Sunday evening to Friday night, the currency market accommodates participants across various time zones without being anchored to a singular physical location.
For those in the UK, recognising when to engage can dramatically influence outcomes. This FXOpen article discusses the pivotal currency trading sessions that may be optimal for UK-based traders.
Understanding Forex Market Hours
Understanding currency exchange market hours is crucial for anyone involved in the global foreign exchange market. Although you may already know this, let us remind you.
The forex market operates on a 24/5 basis, opening during weekdays and closing at weekends. This round-the-clock trading is possible because it’s not tied to a physical location; instead, it relies on a decentralised network of banks, businesses, and individuals exchanging currencies across different time zones.
For traders in the UK, knowing the best forex trading hours can be key to effective trading. The currency market is broadly divided into four main 9-hour-long windows, each starting at different times to cater to traders across the globe. The forex session times UK traders need to be aware of are:
- Sydney Session: 9:00 PM GMT - 6:00 AM GMT
- Tokyo Session: 11:00 PM GMT - 8:00 AM GMT
- London Session: 8:00 AM GMT - 5:00 PM GMT
- New York Session: 1:00 PM GMT - 10:00 PM GMT
Note that during British Summer Time (BST), some of these times are shifted forward by one hour.
These forex market trading times are essential to know, as they indicate when liquidity and volatility are likely to increase, potentially offering favourable market conditions.
The Optimal Times to Trade Forex in the UK
In navigating currency trading, UK-based traders should be aware of two key sessions: London and New York. These periods are optimal forex market hours in the UK, offering greater volumes, volatility, and liquidity. They’re also the periods that see the most releases for three of the major economies: the UK, Eurozone, and the US.
The core forex trading times in the UK are anchored around the London session, which is central to global forex market operations due to London's key position in the financial world. The London trading session time in the UK commences at 8:00 AM GMT (winter time).
This period, ending at 5:00 PM GMT (winter time), is pivotal as it accounts for roughly half of the forex transactions globally, making it a prime trading time due to the high liquidity and the potential for more pronounced price movements.
Likewise, the London-New York trading session time in the UK can be especially advantageous. It’s a crucial overlapping window occurring from 1:00 PM to 5:00 PM GMT (winter time), offering an avenue for traders seeking to maximise their potential returns due to the surge in activity and high-profile economic releases from the US.
During this window, the US stock market opens at 2:30 PM GMT. This secondary opening can also have a notable effect on US dollar-based pairs.
Economic Releases and the Impact on Trading Times for UK Traders
Economic releases and central bank announcements significantly influence UK forex trading times, often driving prices higher or lower. Many UK economic releases—affecting GBP currency pairs—are scheduled around 7:00 AM GMT. This timing offers traders opportunities to engage in trends post-release during the early hours of the London open.
However, some UK data and plenty of Eurozone data are released between 8:00 AM GMT and 10:00 AM GMT, periods typically characterised by increased liquidity and volatility, providing fertile ground for traders.
Likewise, many high-profile US economic announcements—non-farm payrolls, inflation statistics and employment data— are made between 1:00 PM GMT and 3:00 PM GMT. Given the US dollar's dominance on the world stage, these releases can present significant trading opportunities.
Although activity tends to quiet down after London closes, the late hours of the New York session still offer potential entries, albeit with generally lower volatility and volume.
Notably, Federal Reserve interest rate decisions are announced at 7:00 PM GMT with a press conference held after that can cause outsized price movements. The same can be said for the Bank of England and European Central Bank’s interest rate decisions at 12:00 PM GMT and 1:15 PM GMT, respectively, and their subsequent press conferences.
The Worst Time to Trade Forex in the UK
The worst times to trade forex in the UK often occur after 8:00 PM GMT, during the tail end of New York’s hours, when liquidity and volume significantly decrease. This reduction in activity can lead to less favourable trading conditions, including wider spreads and slower execution times.
Additionally, while the Asian session forex time in the UK, partially overlapping with the Sydney session, runs from 11:00 PM to 8:00 AM GMT, it presents challenges for UK traders.
Despite offering trading opportunities, especially in Japanese yen, Australian dollar, and New Zealand dollar-based pairs, the volumes during this period are substantially lower compared to the London and New York sessions. The Tokyo session forex time in the UK accounts for particularly unsociable hours anyway, so many UK traders are unlikely to engage in currency trading during this period.
Trading the London Session: A Strategy
The Asian-London Breakout Strategy leverages the unique dynamics between the calmer Asian session and the volatile London session. It involves setting buy/sell stop orders at the high and low points of the Asian period’s range, aiming to capture movements as London opens at 8:00 AM GMT.
With stop-loss orders placed above or below the range and a strategic approach to take profit – either at the end of the London session or by trailing a stop loss during the day – traders can potentially capitalise on the surge in activity. To delve deeper into this strategy and other session-based setups, consider exploring FXOpen’s 3-session trading system article.
The Bottom Line
Understanding forex trading hours and leveraging optimal times are pivotal for achieving favourable outcomes in currency trading. Luckily, UK-based traders are well placed to take advantage of the many opportunities the currency market presents, given their ability to trade both the London and New York sessions.
For UK traders seeking to navigate the complexities of markets with a trusted broker, opening an FXOpen account can provide all of the tools and insights necessary for effective trading.
FAQs
When Do the Forex Markets Open in the UK?
Forex opening times in the UK start at 8:00 AM GMT (winter time) and at 7:00 AM GMT (summer time) when the London session begins, marking the start of significant trading activity due to London's central role in the global currency arena.
What Time Does the Forex Market Open on Sunday in the UK?
The forex market opens on Sunday at 9:00 PM GMT (winter time) and at 10:00 PM GMT (summer time) in the UK, coinciding with Sydney’s opening and marking the beginning of the trading week.
What Time Does the Forex Market Close on Friday in the UK?
The forex market closes at 10:00 PM GMT (winter time) and at 9:00 PM GMT (summer time) on Friday in the UK, concluding with the end of the New York session and wrapping up the trading week.
Can You Trade Forex on Weekends?
Currency trading on weekends is not possible as the market is closed. Trading resumes with the opening of the Sydney session on Sunday at 9:00 PM GMT (winter time) and at 10:00 PM GMT (summer time).
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
