When to Trade Foreign Exchange Sydney


When to Trade Foreign Exchange Sydney

The foreign exchange market is open 24 hours for 5 days of the week.  The way that this is accomplished is by not having a physical exchange in any country.  This means that trading foreign exchange Sydney does not have to be done during Australian business hours.  Of course, it is important that you know when you should be trading and what you should be trading at certain times.

The Foreign Exchange Sydney Session

There are 4 different fore market sessions that you have to be aware of.  These are the New York, London, Sydney and Tokyo sessions.  Unlike with the stock market you are able to trade any currency pair at any time across all of the market sessions.  The reason for having session on the 24 hours forex market is to determine which countries are trading.

During the New York session the North American countries will be trading.  During the London session all of Europe will be trading.  The Tokyo session cover all of the Asian activity and the Sydney session covers all of the countries around Australia.  During all of these sessions anyone is able to trade from any area of the world.

When to Trade

When you look at the times when you should be trading you have to consider which currency pairs you trade.  The rule of thumb with forex is that a currency trades best during the market sessions of the country.  This means that if you are trading the Australian dollar then you should trade it during the Sydney market times.  While all currencies are traded to a certain extent at all times during the market sessions they will be at the most liquid and the most volatile.

There are also three overlap periods that you should be aware of.  These overlap period are when one market session is closing and the other is opening.  The best overlap session is the London and New York overlap that lasts 4 hours.  This is when the highest volume of forex is moved and the highest number of traders is online.  Of course, the currency pairs that you should be trading are the ones with US dollars and British Pounds in them.  During this time the Euro is also a good option to trade.

Days of the Week

You should not only consider the time of day that you trade, but the day of the week as well.  There are certain days that offer better trading.  Monday’s are considered a bad day for the retail trader.  The opening of the market after the weekend causes the heavy hitter of the market to trade large volumes.  This often creates a number of false trends and reversals which can cause the retail trader to lose money.

The three days in the middle of the week are good for retail trading because the haste of the week slows down.  There are also a number of fundamental releases that take place during these days which traders can take advantage of.  Friday’s are also considered to be bad days to trade because the market will be closing.  There are some heavy hitters that complete a lot of trades at this time.  There are also a lot of heavy hitters who do not trade on this day making the market slightly less liquid.



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