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Forex trading can be done at any time because the forex market's active time span is unlimited. Forex trading lasts for 24 hours (referring to Western Indonesian Time (WIB)), starting from Monday morning and closing in the early hours of Saturday. Even so, there are still ideal forex trading hours so that you can get profit. Therefore, especially for beginner traders, you must know when the best forex trading hours are to start trading in order to increase your chances of getting profit.
Forex Market Hours
You need to know that this forex market network is built in a transaction process involving banking institutions and financial institutions that are active in countries around the world. This is the reason why the forex market can last for 24 hours. In other words, forex trading never takes place centrally in one particular place.
The opening of forex trading hours is from working hours in the city of Sydney, which is the financial center of Australia. Then followed by the Asian financial center opened following the working hours in the city of Tokyo, Japan. Next is the financial center in Europe when banking institutions in cities such as London, England, Frankfurt, Germany, and other cities in Europe. Once the opening hours in Europe are almost over, the American financial center in New York City begins.
A new day in Sydney will begin after the working hours in New York are almost over. And so on every day. These forex trading hours take place like a relay that finally creates the forex trading hour cycle mentioned earlier, starting on Monday until Saturday morning.
Forex Trading Sessions
Forex market active hours are usually divided into three or four sessions. The division of forex trading hours into three sessions combines active hours in Australia (Sydney) and Asia (Tokyo). Meanwhile, forex trading hours in four sessions do not combine the two sessions. These forex trading hours are listed with GMT or Greenwich Mean Time information so it is important for beginner traders, especially, to know the exact time conversion in Indonesia.
If converting to WIB, then this GMT time must be added 7 hours. This means that if the session starts at 05:00 GMT, then in Indonesia it starts at 12:00 WIB. In the listing of forex trading hours, two versions of the opening time are usually written. This is because several countries in Europe and the United States have implemented the DST (Daylight Saving Time) system which usually takes place at the turn of summer.
This DST changes forex trading hours for 1 hour at the opening and closing of the session. The implementation of this DST system usually takes place from March to November. Forex trading hours will return to normal after summer is over and no longer implements the DST system. To make it easier to understand, here is an explanation of the forex trading hours for each trading session.
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Asian Session
In the Asian session, there are five cities that are financial centers that underlie trading activities. The cities included in the Asian session are Sydney, Tokyo, Singapore, Hong Kong, and Shanghai. The total scale of trading in the Sydney session is very small, most traders will only be active after the Tokyo session is active.
According to economic data, trading in the Asian session is greatly influenced by three regions that are considered to be the main economic movement areas, namely Australia, Japan, and China. This is because countries in Europe and America are not yet active (still at night). That is why the Asian session is relatively quiet.
Although the Asian session is relatively quiet, there is still trading taking place. The most traded currencies are the Japanese Yen (JPY), then the Australian Dollar (AUD), and the New Zealand Dollar (NZD). The Asian session begins with Sydney opening hours at 04:00 WIB, and will close at 14:00 WIB. Then continued with Tokyo opening hours at 06:00 WIB, which will close at 15:00 WIB.
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European Session
For the European session, the opening and closing hours are based on the active hours of London, England, which is at 15:00 WIB until closing at 00:00 WIB. In addition to London, the city of Frankfurt, Germany is also the axis of money movement in the forex market. Although not the axis, all other European Union countries also support market movements.
During forex trading hours in this session, all currencies will be active. However, the Pound Sterling (GBP) and Euro (EUR) currencies have greater movements compared to the others. This is natural because London itself has been known to the world as the axis of world finance since the Middle Ages.
Forex trading hours in the European session are the busiest because the times are close and overlap with the opening hours in the American session. Many traders from Asia, especially Indonesia, are also active in this European session because the time is approaching midnight, including still tolerable for Indonesian traders.
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American Session
New York is also one of the cities with rapid economic development, making it a financial hub in the modern economic phase whose profile is almost equal to London's strength. The American session departing from New York is also quite busy with trading because the US Dollar (USD) is a major currency pair in the forex market. That means, most currency pairs must be paired with USD.
USD is often found to weaken in the Asian session because the economic sectors of countries in America are not yet active at that hour. However, this will not last long once entering the American session. This is why novice traders are asked to be vigilant when trading in the American session because there is the potential for a trend reversal in this session.
This American session will start at 19:00 WIB and close at 04:00 WIB the next day, the time almost overlaps with the Australian Session from the city of Sydney. The time span where one session overlaps with another session is commonly known as the overlap period.
Best Forex Trading Hours in the World and Indonesia
For traders in Indonesia, one of the most ideal times to trade is during the overlap of two sessions between the European session and the American session, or between 19:00 - 22:00 WIB. During these forex trading hours, price movements tend to be high. Forex trading opportunities are also more open, allowing traders to gain a lot of profit in a relatively short time.
However, this does not mean that forex trading hours outside of these times do not generate profits. You can still generate profits by trading in other sessions as long as you apply a suitable trading strategy. This means that the ideal trading time must also be accompanied by your overall trading style and strategy.
A simple example is like this. If a trader has a low risk appetite, aka conservative and tends to play it safe, the most ideal trading time is between the Asian session and the start of the European session. You can also close the position before the American session starts. This way, the relative risk can be controlled even though the trading opportunities are fewer.
On the other hand, if you have a high risk appetite, then you should start trading from the beginning of the European session until the end of the American session. These two sessions have the largest price movements with their peaks during the overlap period mentioned earlier. The opportunity for trading is very large, but the greater the risk of loss.
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