Forex: Best strategic time to trade in the UK

Since there is no centralised forex exchange, it is considered an over-the-counter (OTC) market. To this end, the major forex centres’ banks, brokers, and market makers enable forex trading.

As such, trading hours are based on different time zones around the world, so you can trade forex at any time of the day or night. Here, experts Forex Brokers explain the various opening times of the forex market and the best times to trade forex in the UK.

Understanding the trading sessions

Foreign exchange trading occurs 24 hours a day, seven days a week. Although each day is divided into several sessions, each session has a set amount of time that varies depending on the location of the user.

The weekday forex market at many UK Forex brokers is open from 9pm on Sunday until 10pm on Friday, except on holidays and special occasions.

To trade forex, there are three main trading timeslots: Asia-Pacific, Europe, and the United States. The Asia-Pacific session begins at 9pm UK time and ends at 6 a.m. U.K. time the following morning, with Sydney as the first stop.

London, the world's largest forex centre, opens at 8am and closes at 4pm. This session will end with New York trading closing at 9 p.m (UK time) before the Sydney session begins, with trading in New York beginning at 12pm.

The best time to trade Forex in the UK

When London opens at 8am, the UK forex market is at its busiest. Market participants will be interacting with one another, which means liquidity and volatility will likely be high at this point.

Around 10 am (UK time), trading typically becomes less liquid, and it picks back up around 12pm, when the American markets reopen.

The major crosses, such as GBP/USD and EUR/GBP, are frequently traded during the London session. When the London and New York markets meet, as well as the European session, which is open at nearly the same times as the London session, this is especially true.

Historically, the Tokyo-London crossover has been less busy than the London-New York crossover because London and New York trade more hours per day than Tokyo and London do.

Why Forex trading sessions matter

Due to increased trading activity during different sessions or when two sessions in different geographic locations cross, spreads on the forex market are tighter, even though it is open 24 hours a day.

For example, GBP/USD sees higher trading volume between 12pm and 4pm ET on days when both European and US trading sessions are open.

This is when the big institutions, like investment banks, are most active, and relevant economic data for each trading session is often released.

For example, major data releases in the United Kingdom are made available at 8.30am, while in the United States, numbers are typically made available between 11.30am and 2.30pm.

Because the market's reaction to these announcements can cause significant volatility, every forex trader in the UK should be aware of when they are made public so that they can respond accordingly.