Forex Trading Hours Australia Guide

Best Time To Trade Forex In Australia (AEST)

Based on Australian Eastern Standard Time, forex market hours are Sydney, 7:00am – 4:00pm AEST; at 9:00am the Tokyo (Japan) market comes online and before it closes, the London market comes online at 5:00pm; New York opens at 10:00pm and closes at 7:00am when the Sydney (and New Zealand) Forex market opens again.

Most trading occurs when both the American, European & UK Forex market hours are open from 10:00pm to 2:00am AEST during winter. In summer these hours shift to 12:00am to 4:00am due to daylight saving.

Generally, the opening of a market is the most important period, as it often sets the tone for the trading session and can have very high liquidity (especially in the first few minutes).

Bank Holidays (Public Holidays)

During selected key national bank holidays (know as public holidays by Australians) a country’s currency market may close, limiting the overall forex trading hours. Worldwide, days such as Easter and Christmas lead to all currency markets closing. Normally when there is a national USA bank holiday, the worldwide currency markets that do trade do so at lower levels.

Do I Need Multiple Forex Brokers To Trade All Hours?

The simple answer is no. Almost any Australian forex broker has the ability to access any currency market when open and trade multiple currencies across a trading day. Just because for example Asian markets (i.e. Japanese) is only open, doesn’t mean you couldn’t trade currency pairings such as AUD/USD to EUR/USD. An interesting fact is that the AUD/USD is actually traded the most when the Australian market is closed, highlighting that opportunities exist for currency traders all the time. It is possible that volumes for these currency pairings will be lower during different periods of the day, but with currency markets volume being multiples of worldwide share-markets there is always an opportunity to trade.

All Australian forex trading brokers are open at least 24/5. If the broker is a market maker or uses a dealing desk, then you will be restricted to trading only from when the Australian markets open on Monday morning till the end of US trading on Friday (or for Australians early Saturday). Not only can you trade through their forex trading platforms, but the currency brokers also keep customer service open during all of these forex trading hours. This is critical if you require assistance even during the early hours of the morning.

On the other hand, if you are using an ECN broker for trading, then trading may be able to be done 24/7. ECN technology allows for trading to be done during all hours because it uses technology to automatically match your order to the best prices on offer in the market.  It does not require brokers and liquidity providers to be active in executing and accepting trades.

This is especially handy for those who are not able to trade during conventional hours or are using automated trading. If you are using an ECN account, you will need to check with your broker if they allow trading outside market opening hours.

At What Trading Hours Do Currency Pairings Fluctuate The Most?

There are no set Forex trading hours when currency paring historically fluctuates the most. While volume/liquidity is the highest when multiple markets are open (eg when the London and New York markets are open) this doesn’t necessarily mean the currency will fluctuate more. There are though a few general events that can lead to currency pairings having large changes including:

1) When markets open:

When a new country’s currency exchange market opens often, the first few minutes see some larger price fluctuation as traders enter the market factoring in movements that have occurred in previous markets. This also impacts that currencies traded from the AUD, JPY, EUR, GBP to the USD.

2) When rate decisions are made:

Countries reserve banks such as the RBA make rate announcements on the same day of the month and a set time. These announcements directly impact relevant currency pairs and increase currency trading. Knowing the key reserve bank dates and times is critical for any trader.

3) When economic data is released:

Like the reserve bank announcements, government departments regularly release economic performance figures from terms of trade to warehouse orders and production. Like rate announcements, these directly impact currency pairings and can see large fluctuations. Over 2015, the Chinese announcements have worldwide led to the largest fluctuations.

What Australian Forex Broker Features Suit Traders?

As mentioned earlier, all brokers are open during all hours that the major currency markets are active. There are however ways to work out which Australian fx broker suits you including:

a) Leverage Levels

Without leverage, making sizeable profit or losses would be near impossible. While leverage is a great benefit when foreign exchange trading, it also increases your risk profile. Only those with experienced trading activity and a high level of risk appetite should accept a broker’s maximum leverage.

b) Spreads

There are two ways CFD brokers make money. One way is through spreads which is the difference between the buy and sell rate. The second way is to set commissions based on trading volume. It’s important to work out the volume you plan to trade and then working out based on average spreads/commissions which broker will provide you with the best value for money. Generally, ECN brokers which allow you to make trades directly without liquidity providers offer lower spreads than market makers.

c) Execution Speeds

With currency markets existing often overseas, having fast connections to these markets is critical when individuals trade forex. Making sure that your fx broker not only has fast connections to overseas markets (eg through optic fibre cables) combined with fast servers will help give you the edge when trading outside of Australian market hours. It also reduced events such as slippage, which is when your order is filled lower/higher than when you placed the order due to the delays in execution speeds. Some brokers have one-click trading, which allows you to execute your trades with one click, thus saving time. Pepperstone offers some of the fastest execution speeds in the industry.

d) Fail-safes

While all forex brokers offer stop/loss features when trading, it is possible to exceed loss levels set due to slippage. Due to the high levels of risk this presents day, traders may select a broker that offers guaranteed stop loss orders. This means they can’t lose more than a set amount for a trade. Another fail-safe broker’s offer is negative balance protection. This is where broker automatically exit CFDs traders from the market when their deposit level reaches $0 balance. Even if slippage does occur, the broker pays the difference. Reading the risk warnings of brokers is important prior to trading currency.

e) Regulation

It is also important to understand what country regulates the broker. Australian regulation is considered one of the premium regulators requiring brokers to have training requirements and to segregate clients’ funds into separate accounts. Like with any investment product, if it’s too good to be true, it normally is. Play it say and ensure the broker make sure they have an Australian Financial Services Licence and has a good reputation and market share. All brokers trading in Australia such as IC Markets and Pepperstone are regulated by ASIC (Australian Securities Investment Commission). These brokers hold an AFSL licence.

f) Account Types

Most brokers will offer a range of day trading accounts to suit your needs. These will typically include standard accounts, which will have a fee for each trade executed instead of commission. These accounts tend to be best if you wish to keep your trade costs simple.  Brokers will often have a second type of account, which will base transaction cost on commission. These accounts are best for high-volume forex traders, as there can be substantial savings when trading using a commission.

g) Minimum Deposits

When you open a new trading account, the broker will require a minimum deposit. Some brokers do not require any deposit to simply open an account while others have a minimum $200. You will need to add some funds if you do want to execute actual trades.

h) Education Resources

Good brokers offer resources such as forex training materials, forex markets review, forex news to help you learn about forex trading and happenings in the forex world. A comprehensive video tutorial series is offered by IC markets to help you get started with your trading education. There is also a range of technical analysis resources.