29 October 2025
By Roger Kennedy
roger@TheCork.ie
Foreign exchange markets never sleep; they operate 5 days a week, for 24 hours. While one part of the world sleeps, another is just waking up, and currencies are open to trade around the clock. These constant activities create opportunities but also pose challenges for traders, as time zones affect everything, including volatility, spreads, and news releases. Understanding forex trading sessions is crucial for recognizing when the markets are most volatile and when to avoid trading due to low liquidity and wider spreads.
The 24-hour nature of forex markets demystified
Forex operates 24 hours a day, five days a week. This is because currencies are traded globally across different time zones and major financial hubs. The main reason? Forex market trading sessions: there are four trading sessions, Sydney, Tokyo, London, and New York. When Sydney opens on Monday early in the morning, it starts the trading week, followed by Tokyo, London, and New York. The forex market is unique because these sessions overlap. When London and New York are both open, the market becomes both extremely liquid and very active. This is beneficial for traders because not only are there many trading opportunities due to fast-moving markets, but spreads become tighter and gaps rarer. Nearly half of all daily transactions occur during this overlap. Understanding and using this rhythm in your trading can help to plan trading more strategically. You do not have to be awake 24/5; just knowing which sessions are best suited to your financial goals and strategies is enough.
Four major sessions explained
As we have mentioned, there are four main trading sessions. Let’s briefly explain an overview of each of them and their main characteristics that every trader must understand.
Sydney Session (Pacific)
The Sydney session is the first session that opens every Monday, roughly from 9 p.m. to 6 a.m. GMT. It opens after the weekend and often sets the tone for the week’s price action. Liquidity is lower compared to other sessions, but currency pairs like AUD/USD and NZD/USD are more active. This session is a calm period, which makes it ideal for traders who prefer lower volatility.
Tokyo Session (Asian)
Following Sydney, Tokyo opens from midnight to 9 a.m. GMT. Japan is the world’s biggest forex hub, and it drives significant movements in yen pairs like USD/JPY and EUR/JPY. News from China and Australia usually influences this trading session, and traders who trade during the Tokyo session should be aware of major Chinese and Pacific financial news. Traders often use this session to identify early trends that may be carried into the London session. In fact, traders who operate during the London and NY sessions use the Asian sessions to define highs and lows and use them as major support and resistance levels in their trading, making the Tokyo sessions crucial in day trading in other sessions as well.
London Session (European)
London opens after Tokyo from 8 a.m. to 5 p.m. GMT, and is the heartbeat of Forex. It is the most active and liquid trading session and accounts for about 35% of daily trading volume. As the daily turnover is around 7+ trillions of dollars, you can see why London is so important. True action starts when London overlaps with New York, this is where most active hours take place with heightened volatility as the major news affects the global markets from the USA. For traders seeking strong moves on major pairs like EUR/USD and GBP/USD, this is the time to trade the markets.
New York Session (American)
The New York trading session usually runs from 1 p.m. to 10 p.m. GMT. It often continues and even amplifies movements started in London or reverses them after U.S. economic news releases. Major data, such as Non-Farm Payrolls (NFP) and Federal Reserve announcements, usually cause major price volatility. When the London session comes to an end, the activity decreases in the NY session as well. Towards the NY session’s end, the activity fades, and there is little volatility.
Why time zones matter for Irish and global investors
For Irish traders, time zones can work to your advantage. The London trading session is the closest to Ireland’s local time zone, which gives traders access to the most active market hours. And all this without disrupting your daily routine, which is a luxury in modern forex trading. Morning traders can capture European market volatility while afternoon sessions overlap with New York’s opening for added volatility. However, Irish forex traders should be careful with late-night sessions like Tokyo and Sydney because volatility fades and price tends to spike while spreads are usually higher, making it trickier to generate consistent profits.