Jessie Taylor
The forex market is open 24 hours a day, 5 days a week, from Monday to Friday. The trading week begins at 5 pm EST on Sunday and ends at 5 pm EST on Friday. The time at which a new daily candlestick forms varies depending on the trading session. The Sydney session is the first trading session and begins at 5 pm EST on Sunday, followed by the Tokyo session at 7 pm EST on the same day. The London session starts at 3 am EST on Monday, and the New York session starts at 8 am EST. While some brokers close the day candle at 2:00 PM EST, others do so at 3:00 PM EST, 5:00 PM EST, or even 6:00 PM EST.
| Characteristics | Values |
|---|---|
| Trading day start time | 5 pm EST on Sunday |
| Trading day end time | 5 pm EST on Friday |
| Trading day duration | 5 days |
| Trading sessions | Sydney, Tokyo, London, New York |
| Sydney session start time | 5 pm EST on Sunday |
| Tokyo session start time | 7 pm EST on Sunday |
| London session start time | 3 am EST on Monday |
| New York session start time | 8 am EST on Monday |
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What You'll Learn
Trading days begin at 5 pm EST on Sundays
The FX market is a 24-hour market, but trading days are structured differently, beginning at 5 pm EST on Sundays and ending at 5 pm EST on Fridays. This is because the market opens at the start of the business week in Australia and closes at the end of the business week in the US.
As such, the daily candle in forex trading resets at 5 pm EST, which is also 10 pm GMT and 7 am AEST (on Mondays). This is the time when most traders will look to place their trades, as it is the start of a new trading day.
Some brokers may offer different candle start and end times, such as 17:00 New York (5 pm EST) or 00:00 New York (midnight). The difference of a few hours may not make a significant impact on trading decisions, but it is important to be aware of the timing followed by the major players in the market.
Therefore, for those trading daily charts, it is crucial to be aware of the 5 pm EST daily candle close time and ensure that their broker's charting is aligned with this timing. This allows traders to make informed decisions based on the same information that the "Big Guns" of the market are using.
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The Sydney session starts at 5 pm EST on Sundays
The forex market is divided into four major trading sessions: the Sydney session, the Tokyo session, the London session, and the New York session. Each session has distinct characteristics in terms of liquidity and volatility, and understanding these patterns is crucial for traders to optimise their strategies.
The Sydney session, marking the start of the trading week, begins at 5 pm EST on Sundays. This corresponds to 8 am Sydney local time on Monday, as the forex market operates across different time zones, creating a continuous five-day trading window from Sunday to Friday. The Sydney session ends at 2 am EST, overlapping with the Tokyo session, which opens at 7 pm EST.
The Sydney session is particularly important as it sets the tone for the week. Any significant events or elections that occur during the market closure can lead to gaps in forex prices when the market reopens. Therefore, traders need to be vigilant about such developments to make informed decisions for the upcoming week.
The Sydney session also overlaps with the Tokyo session, creating a key liquidity period for FX traders. This overlap further extends into the London session, which starts at 3 am EST and is known for its high liquidity. The New York session opens at 8 am EST, coinciding with the London session and resulting in substantial market activity and volatility.
Traders can benefit from understanding these session overlaps, as they generally witness heightened market activity and potential profit opportunities. The forex market remains closed over the weekend, from Friday evening to Sunday evening, with the exception of two annual public holidays: New Year's Day and Christmas Day. Additionally, Daylight Saving Time shifts impact trading sessions, requiring traders to adjust their strategies accordingly.
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The trading week ends at 5 pm EST on Fridays
The forex market is open 24 hours a day during the working week, which means that traders can access the market at any time from Monday to Friday. However, the market is closed on weekends, so trading does not occur on Saturdays and Sundays.
The forex market uses Coordinated Universal Time (UTC), also known as Greenwich Mean Time (GMT), as its standard reference time. This is because the forex market operates across various time zones, so UTC provides a standardised time reference.
The forex market is divided into four main trading sessions: Tokyo, London, New York, and Sydney. Each of these sessions has its own unique characteristics and trading opportunities. The London and New York trading sessions overlap between 1:00 PM UTC to 4:00 PM UTC, which is considered an optimal time for trading due to increased trading volume and liquidity, leading to more significant price movements.
Traders should be aware of the unique characteristics of each trading session and aim to trade during periods of high trading volume and overlap between financial centres. While the forex market is open 24 hours a day during the week, there are periods of downtime when the market is quiet and trading volume is low. Therefore, traders should focus their energy on specific trading sessions and avoid trading when only one session is open.
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Some brokers close the day candle at 2 pm EST
The timing of the daily candle close in forex trading is a topic that has sparked some discussion and confusion among traders. While there is no universal agreement on the exact time, it is generally understood that the candle close time can vary depending on the broker and the trading platform being used. Indeed, some sources suggest that the daily candle close times can vary from 2 pm EST to 3 pm EST, 5 pm EST, 6 pm EST, or even 7 pm EST.
Some brokers choose to close the day candle at 2 pm EST, which is an earlier cutoff point compared to other brokers. This variation in candle close times can lead to conflicting signals on different trading platforms, causing confusion for traders who rely on consistent data for their strategies. It is important for traders to be aware of these time differences and to understand that the choice of broker and platform can impact the timing of their trades.
The 2 pm EST candle close time is often chosen by traders who want to align their trading analysis with the New York close, which is considered a key reference point for US traders. By using the New York close, traders outside of the US, such as those in Italy or the UK, can ensure they are analysing the same information and market movements as their US counterparts. This consistency can be valuable for certain trading strategies, especially those that involve analysing price patterns and indicators that rely on specific time frames.
However, it is worth noting that the choice of candle close time ultimately depends on the individual trader's preferences and strategies. While some traders prefer the 2 pm EST close, others might opt for different brokers or platforms that provide a later close time, such as 5 pm EST or 6 pm EST. These later close times are also commonly used and accepted in the industry, and they may better suit traders who want to capture more of the daily market activity or those who are located in different time zones.
In conclusion, the decision to close the day candle at 2 pm EST is influenced by the desire to align with the New York close and the trading practices of US traders. While this choice offers consistency and synchronisation with a key financial centre, it is not the only option available. Traders have the flexibility to choose brokers and platforms with different candle close times that better suit their specific trading strategies and time zone considerations.
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There is no industry standard for daily charts
For example, the Sydney session (also known as the Pacific session) is the first trading session of the forex market, starting at 5 pm EST on Sunday. This is followed by the Tokyo session (also known as the Asian session) at 7 pm EST on Sunday. The London session (also known as the European session) starts at 3 am EST on Monday, and the New York session starts at 8 am EST on Monday. These varying start times mean that there is no universal start and end time for daily charts.
Different brokers may also have different practices for closing daily candles. Some brokers close the day candle at 2:00 PM EST, 3:00 PM EST, 5:00 PM EST, or 6:00 PM EST. This lack of standardization can be confusing for traders, especially when using multiple platforms or packages that provide conflicting signals.
While there is no industry standard for daily charts, it is important to note that some sources suggest that 5 pm EST is a significant time for trading daily charts. This is because it marks the end of the trading week for forex, and it is when some traders place their trades.
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Frequently asked questions
The trading day in the forex market begins at 5 pm EST on Sunday and ends at 5 pm EST on Friday. This time frame is known as the forex trading week. The Sydney session is the first trading session, starting at 5 pm EST on Sunday, followed by the Tokyo session at 7 pm EST on the same day. The London session starts at 3 am EST on Monday, and the New York session at 8 am EST on Monday.
Yes, some brokers close the day candle at 2:00 PM EST, 3:00 PM EST, 5:00 PM EST, or 6:00 PM EST. Oanda, for example, runs from midnight to midnight, while Tradestation ends at 5 pm Eastern.
Some traders argue that it does not matter, as it is the high/low that is important. However, others suggest that it is crucial to follow what the major players in the market are doing and which charts they are looking at.
