Forex Trading Sessions in Malaysian Time | Best Time to Trade Forex

Understanding the Forex Market Hours

24-hour Forex Market

The Forex market, unlike most other financial markets, is open 24 hours a day, five days a week. This is because Forex trading is decentralized, happening directly in the global market rather than on a centralized exchange. The 24-hour market opens at 5:00 AM MYT in Sydney, Australia, where it's Monday morning, and closes at 5:00 AM MYT in New York City.

The fact that Forex operates 24 hours a day can give traders unique opportunities. Whether you're an early bird or night owl, you will find a market that suits your schedule.

Forex Trading Sessions by Malaysian Time

The 24-hour Forex market is split into four major trading sessions: the Sydney session, the Tokyo session, the London session, and the New York session, each named after a major financial center and follows the local “work day” of traders within that city.

The timings of each session are influenced by daylight saving. The market operates in a way that there's always at least one financial center in the world that's open, facilitating traders with the opportunity to trade Forex anytime during the weekday.

Listed below are the four major forex trading sessions:

Country	Forex Trading Sessions	Malaysian Standard Time/MYT
	Sydney	5:00 AM - 2:00 PM
	Tokyo	7:00 AM - 4:00 PM
	London	3:00 PM - 12:00 AM
	New York	8:00 PM - 5:00 AM

1. Sydney Session (Asian-Pacific Session): 5:00 AM - 2:00 PM MYT

The Sydney session is the first trading session to open in the forex market, signaling the start of the forex trading day. It begins at 5:00 AM MYT and ends at 2:00 PM MYT, right before the Tokyo session gets into full swing.

The Sydney session may not be the most volatile or active session due to its starting hours and smaller relative market size, but the importance of Australia's economy to the global marketplace makes it a key player in the forex world. Its proximity and close ties to Asian markets also mean that often events and market movements in these regions may have an impact on the Sydney session.

Traders looking to trade the Australian Dollar or other currency pairs involving Asian currencies like the Yen or the Kiwi, might find good opportunities during the Sydney session. And the liquidity might be lower during this session, which can lead to higher spreads.

2. Tokyo Session (Asian Session): 7:00 AM - 4:00 PM MYT

Once the Sydney session has been underway for a few hours, trading begins to pick up in Tokyo. The Tokyo session is also known as the Asian trading session. This session becomes active around 7:00 AM Malaysian Time (MYT). It ends at approximately 4:00 PM MYT.

Being the financial center of the Asian market, when the Tokyo session opens, it experiences high trading volume and size, second only to London. The most traded currencies during this time are the Japanese Yen (JPY) and the Australian Dollar (AUD).

Among the 8 top currency pairs, the most active ones during the Tokyo session are USD/JPY (US Dollar/Japanese Yen) and AUD/JPY (Australian Dollar/Japanese Yen). This makes sense since the Japanese economy is the third-largest in the world and the Yen is the third most traded currency.

One important thing to note about the Tokyo session is that there is overlap with the Sydney session for a few hours and the overlap period might be among the active hours in the Asian session. Furthermore, the Tokyo session also overlaps the London session for an hour.

However, this session can sometimes be relatively quiet because it's not peak trading time for any of the major countries. Nevertheless, events and developments in other Asian economies like China can have a considerable effect on the market, thus impacting the Tokyo session.

3. London Session (European Session): 3:00 PM - 12:00 AM MYT

As Asian trading wraps up, the London session begins. The London session, also known as the European trading session, is one of the busiest forex trading sessions. It begins at 3:00 PM Malaysian Time (MYT), and ends at 12:00 AM MYT.

With London being one of the leading global financial centers, it is home to over 30% of all forex transactions. This means the London session experiences the highest trading volume and volatility, making it a prime session for forex trading.

The most traded currencies during the London session are the Euro (EUR), British Pound (GBP), and the US Dollar (USD). The most popular currency pairs during this time include EUR/USD, GBP/USD, and USD/CHF (Swiss Franc).

Another crucial aspect to note about the London session is the overlap with both the Tokyo session (for about one hour) and the New York session (for about four hours), creating periods of even greater market liquidity and trading volume.

Fluctuations during the London session can be substantial, and important economic news from Europe can cause high market volatility during this session, providing significant trading opportunities.

4. New York Session (U.S. Session): 8:00 PM - 5:00 AM MYT

The New York session, also known as the American session, is the last major forex trading session for the day. It starts at 8:00 PM Malaysian Time (MYT), and ends at 5:00 AM MYT.

As New York is considered a global financial capital, it sees a significant amount of forex trading volume. Indeed, the largest volume of U.S. dollar-denominated currencies are traded during this period, including the pairs USD/JPY and GBP/USD.

The overlap between the London and New York sessions, from 8:00 PM to 12:00 AM MYT, is known as the most volatile period of the day, with the biggest price moves and highest liquidity. This overlap is often the best time to trade, as transaction costs (spreads) are typically at their lowest.

However, the session may become quieter after the London close, but occasional volatility can be observed, especially on days when U.S. economic reports are released. Therefore, understanding the timing of economic news releases is crucial for forex traders.

Forex Trading Session Overlaps by Malaysian Time

Forex trading session overlaps occur when two trading sessions are open at the same time. These periods often experience greater trading volume and higher volatility due to the increased number of participants in the market. The more traders, the more transactions, leading to faster movement in currency pairs, and potentially, more opportunities for traders.

The table below shows the three overlaps that occur every day:

Country	Overlapping Sessions	Malaysian Standard Time/MYT
	Sydney & Tokyo	7:00 AM - 2:00 PM
	Tokyo & London	3:00 PM - 4:00 PM
	London & New York	8:00 PM - 12:00 AM

1. Sydney & Tokyo Overlap (7:00 AM - 2:00 PM MYT)

This is the first overlap of the day, and generally, the least volatile. The overlap of the Sydney and Tokyo sessions occurs between 7:00 AM to 2:00 PM MYT. During this period, both the Australian and Asian markets are active. However, it can occasionally experience periods of high market activity, especially if significant financial news or events come out of Australia or Japan during this time.

The major currency pairs that see increased activity during this session include the Australian Dollar (AUD), Japanese Yen (JPY), and their cross pairs. For instance, AUD/JPY, AUD/USD, and USD/JPY can see increased trading volumes.

For traders who are based in Asia and Oceania, or those who are able to trade at this time, this overlap can present opportunities in these currencies. However, liquidity might be somewhat lower during this overlap compared to the others, which may sometimes result in higher spreads.

2. Tokyo & London Overlap (3:00 PM - 4:00 PM MYT)

This overlap is only for an hour from 3:00 PM to 4:00 PM MYT and not as volatile as London and New York overlap. During this hour, both European and Asian traders are active, resulting in a higher liquidity level than usual.

Although this overlap is relatively short, it can lead to some volatility in the Forex market, especially for currency pairs connected to Europe and Asia. Pairs involving the British Pound (GBP), Euro (EUR), and the Japanese Yen (JPY) - such as GBP/JPY and EUR/JPY - are often traded during this time.

Moreover, any significant news announcements from Europe or Asia could induce further volatility, offering potential opportunities for traders. These announcements could be related to economic indicators, monetary policy updates from central banks, political news, among others.

3. London & New York Overlap (8:00 AM - 12:00 PM MYT)

This overlap occurs from 8:00 AM to 12:00 PM Malaysian Time (MYT). It is the most active, with the highest volume of trades taking place. The New York and London markets are two of the most influential, and as a result, many important economic news announcements occur during this period, creating potential volatility and potential trading opportunities.

During this time, both the largest and the second-largest financial centers, New York and London, are actively trading. As such, this overlap generally sees the highest amount of volatility and liquidity, making it a popular time for traders to engage in the forex market.

Expect to see an increase in trading activity in pairs involving the British Pound (GBP), Euro (EUR), and the US Dollar (USD). Some of the most commonly traded pairs during this overlap include EUR/USD, GBP/USD, and the USD/JPY pair.

A large number of significant economic news announcements from both the United States and Europe occur during this period, which can add to market movements and volatility. Traders need to pay close attention to such announcements as they can create new trading opportunities.

Best Time to Trade Forex in Malaysia

The best time to trade Forex in Malaysia is generally believed to coincide with the overlap of the London and New York sessions. This is typically from 8:00 pm to 12:00 midnight Malaysia time (MYT), when the market's liquidity and volatility are at their highest due to an increased volume of transactions. By trading during this overlap session, Malaysian traders have the opportunity to capitalize on major currency pair movements, potentially leading to profitable trades.

Best Time Not to Trade Forex in Malaysia

The times that are typically considered not optimal for trading Forex in Malaysia are the periods of lower volatility and liquidity, which often correspond to the times when the major market sessions are closed.

• Transition periods between the major sessions, from 1:00 AM MYT to 4:00 PM MYT, and from 6:00 AM MYT to 9:00 PM MYT.
• The periodshortly before and after major financial news releases, as this can lead to extreme volatility and unpredictable movements in the market.
• Periods of local public holidays or international bank holidays, where trading volume can be considerably lower than usual, could lead to unpredictable market behavior.

These periods might not present as many trading opportunities and price movements can be unpredictable.

Trading Strategies Used for Different Forex Sessions

Different forex trading strategies can be utilized during different forex sessions, depending on conditions such as market volatility and liquidity.

Scalping during High Volatility Sessions (London & New York Overlap)

Scalping during High Volatility Sessions, particularly during the London and New York session overlap, is a strategy that aims to take advantage of small price changes in the market to generate a quick profit. This overlap period is characterized by high liquidity and volatility due to the volume of transactions taking place.

The scalping strategy involves opening a high number of short-term trades. These trades usually last only a few minutes or even seconds, and seek to make a small profit from each trade, which can add up over time.

The high volatility during the London and New York overlap session is suitable for this type of strategy as the increased market movement offers more opportunities for traders to profit from these small changes in price. However, this strategy requires fast decision-making skills and constant market observation. It's also important to be mindful of the transaction costs as they could easily eat up the profit from these small trades if not properly managed.

Carry Trade Strategy during Sydney/Toyko Session

Carry Trade Strategy is a frequently used Forex trading strategy, primarily employed during the Sydney and Tokyo sessions in the Asian Trading hour.

This strategy involves a trader borrowing a low-interest-rate currency (also known as the 'funding' currency) and investing in a high-interest-rate currency (also known as the 'target' currency). The main aim of this strategy is to take advantage of the difference or 'carry' between the two interest rates. Profits can be made both from the interest rate differential and if the target currency appreciates in value.

The Asian session, including the Sydney and Tokyo trading hours, is considered a period of lower volatility compared to the London or New York sessions, which makes it less risky for the application of Carry Trade Strategy. Usually, currency pairs involving AUD (Australian Dollar), NZD (New Zealand Dollar), and JPY (Japanese Yen) are frequently used due to the interest rate disparities in their economies.

However, while being often labeled as a “low-risk” strategy, carry trades can still incur losses if the exchange rate between the two currencies moves significantly in the opposite direction.

Trend Following during End of New York Session

Trend Following is a strategy often used by traders towards the end of the New York session in Forex trading.

As the name suggests, this strategy involves identifying an existing trend in the market and opening a position that aligns with this trend. It essentially works on the idea that price trends may continue for an extended period. This means if a currency pair is showing an upward trend, traders will open a 'buy' position, and if the trend is downwards, they'll open a 'sell' position.

The end of the New York session is a significant time for this approach as it marks the close of the regular trading day and can often set the tone for the market when it reopens. A new or continued trend during this time may offer profitable trading opportunities.

Breakout Strategy During London Session

The Breakout Strategy is often utilized during the London session in Forex trading. This strategy revolves around the concept of “breakouts,” which occur when the price of a currency pair moves beyond a pre-determined support or resistance level with increased volume.

The London session is considered a highly active time period due to its high volatility and liquidity, brought about by the substantial number of transactions occurring. This creates large price swings, making it an ideal time to employ the Breakout Strategy.

When using this strategy, a trader typically sets a pre-defined entry point above or below the support or resistance levels on the assumption that the price movement will continue in the same direction once these levels have been surpassed. If the breakout happens, they will enter the market and try to gain profits from the continued momentum.

In contrast, if the price fails to break through the support or resistance level and instead moves in the opposite direction, the trader could encounter a “fakeout,” which could lead to potential losses.

FAQs

Which is the most volatile session for forex trading？

The most volatile session for forex trading is typically London and New York overlap, occurring from 8:00 AM to 12:00 PM Malaysian time. This period shines with its increased liquidity and notable price movements, offering a golden opportunity for traders eager for dynamic market action.

What is the best time to trade Forex in Malaysia？

The best time to trade Forex in Malaysia typically falls during the overlap of the London and New York market sessions, from 8:00 PM to 12:00 midnight Malaysia time (MYT). During this period, market liquidity and volatility are at their peak, offering potentially more profitable trading opportunities.

What currency pairs are recommend to trade in Malaysia？

The choice of currency pairs depends on your trading strategy, risk tolerance, and market knowledge, but popular pairs often include major currencies like EUR/USD, GBP/USD, and USD/JPY. Due to regional proximity, pairs involving the Malaysian RM (MYR), like USD/MYR, EUR/MYR might also be of interest.

How much can I start forex trading in Malaysia？

In Malaysia, the amount you can start forex trading varies depending on the forex broker and the type of account you open. Many brokers require a minimum deposit of USD 100 to open a standard trading account, while some brokers offer micro accounts with a minimum deposit as low as USD 10.