Tokyo · London · NYC, does the movement of the market change by time zone?

During the daytime I hardly moved, but starting from the evening the price suddenly began to move. It moved a lot in the middle of the night and settled by morning. When you trade forex, you notice that the market's character changes depending on the time of day.

This time, I will整理 the main market time zones and how to utilize their differences in trading.

Time zones of the three major markets (rough guide in Japan time)

Forex is not traded on an exchange but over-the-counter, so there is no strict opening or closing time. Also, due to the switch between daylight saving time and standard time in Europe and America, Japan time is generally about one hour off. The times in the table are only approximate.

Characteristics by time zone

Tokyo time
Trading in currency pairs involving the yen is the focus. It often moves relatively calmly, but there are times when it moves around certain moments, such as around the base rate (the time when Japanese banks determine the benchmark rate for foreign currencies).

London time
A high volume and more active price movements are likely in this time zone. There are times when price movement breaks out of the Tokyo-time range.

New York time
A period with many US economic indicators releases. The overlap with London time is said to be particularly active for trading.

Pay attention to overlapping time zones

The overlap between London and New York time (night in Japan) is a period with many participants and tends to have larger price moves. For short-term trading, opportunities increase, but price moves faster, so stop-losses may also occur quickly.

Deciding your trading hours

1. List the hours you can trade: Times when you can actually look at charts due to work or life commitments
2. Know the character of those time zones: Which market’s time it is and how easy it is to move
3. Align with your strategy: For example, a strategy that aims for large moves in a time with small price movement may not fit well

Even with the same method, the results can vary depending on the time zone used. Reviewing past trades by time zone may reveal times that suit you.

Note

• There is no rule that “this time will always move.” It changes greatly around holidays, economic indicators, and news
• Early morning (toward the end of the New York market) has light trading and wider spreads
• Be careful of shifts in the times during daylight saving time transitions

Being aware of time zones makes it easier to understand questions like “Why didn’t it move today?” or “Why did it move suddenly?”