The global currency market continues to draw investors from all around the world thanks to its 24-hour trading. It is what has made it the largest market it is today. The FX market is divided into four trading sessions: Sydney, London, New York, and Tokyo, allowing for continuous trading.
You can give yourself an edge by knowing the optimum times to conduct transactions during various sessions, the Sydney session forex pairs, and market hours. The best pairings to trade during the Sydney session, along with everything else you need to know about the Sydney session, is covered here.
Australian Financial Markets
Australia provides aspirant traders and investors with a wide range of possibilities for achieving their financial goals. There are numerous equities, currency, and derivative markets that are easily accessible, and Australia’s well-known markets and goods are as follows:
- Australian Stock Exchange (ASX): With more than 2,000 listed businesses, the ASX provides traders with a wide range of uncommon stocks and indices. There are additionally derivative products available for commodities, debt securities, and equity indices.
- Australian National Stock Exchange (NSX): The NSX is a registered Tier 1 market operator that specializes in capital-raising options and growth stock offerings.
- Forex: A decentralized over-the-counter (OTC) financial market. Participants can engage in forex trading via the internet portal 24 hours a day, 5 days a week. It specializes in trading currency pairings and CFDs.
Australia’s markets are an accurate reflection of its status as a powerful economic force on the world stage. The nation’s financial markets rank among the top 10 globally in terms of raising equity and capitalization, while having the twelfth-largest economy in the world.
What time does Sydney session start?
For traders, the Sydney session is the most desirable because of its advantageous forex market hours. FX market hours refer to the trading timetable that participants in the currency market must adhere to. The market often is open 24/7 during the week but is closed on the weekends. The two busiest trading periods, London and New York, account for the majority of trades on any given day since they overlap. Although the trading periods overlap in time, traders are quick to acknowledge that the following time zones are the busiest during the four trading hours:
- London: 3 a.m. to 11 a.m. (EST)
- New York: 8 am to 5 pm (EST)
- Sydney: 3 pm to 12 am. (EST)
- Tokyo: 7 pm to 4 am. (EST)
Is the Sydney session worth trading?
The varying hours of operation for forex trading make it distinct. Despite the fact that the trading week starts on Sunday at 5:00 EST, not all times are suitable for trading FX pairs during the Sydney session. The greatest time to trade is when the market is lively, seasoned traders will tell you. And when multiple markets are open, this typically occurs.
A large fluctuation in the trending pairings will occur during this period due to the intensified trading environment. You need to wait for the overlap for the Sydney session. Typically, the Sydney session and the Tokyo session coincide. Although less volatile than the US/London gap, this overlap nonetheless presents intriguing trade opportunities.
Experienced traders can be sure to have a chance to trade during a session with higher pip volatility. The EUR/JPY pairing could be the traders’ primary focus because of the overlap that greatly affects it. There can be some significant trade fluctuations during the two-hour overlap.
Trading tips for the Sydney session
When trying to decide which trading methods to use for important currency pairings and exotic currency pairs, traders frequently feel lost. Whether to become a day trader, scalper, news trader, position trader, or swing trader is another decision that the majority of traders can’t seem to make. These are all various trading techniques.
Knowing what approach to use will help you avoid failing while others succeed. The following are various trading tactics to take into account, depending on how you would like to conduct your trades:
- The ideal long-term strategy is position trading, which enables you to hold your transactions for weeks or even months at a time.
- Swing trading necessitates trading for one to four hours, with the goal of capturing a single movement in the currency pairings during the Sydney session.
- In order to capture intraday volatility, day trading requires you to trade for five to fifteen minutes at a time. You might trade the most volatile session at this point.
- Scalping is not ideal technique for the Sydney session because your earnings could rapidly be eliminated by transaction fees (swaps and spreads).
Knowing which approach works best for you might help you avoid wasting weeks’ worth of effort, money, time, and frustration. Before trading, make sure to ask yourself these three questions:
- Are you using your trades to generate money or increase your wealth?
- What percentage of your free time can you devote to trading?
- Which forex trading approach is best for you?
To succeed as a trader, you should become proficient at market analysis including technical indicators, price action analysis and drawing support and resistance. Without it, you’ll probably employ the incorrect technique, which can cost you enormous loses. You could always practice trading on a forex demo account to see what type of Sydney session trading strategy works best for you.
How do currency pairs work?
A quote of two different currencies is referred to as a currency pair. A currency is quoted here versus another. The base currency in currency pairs is the one listed first. In this instance, the second currency is referred to as the quotation and serves as the benchmark.
To determine how much of the quote currency is required to buy one unit of the base currency, you must compare currency pairs against one another. Each currency often has a three-letter sign that makes it simple to distinguish between them throughout the Sydney session.
Throughout the trading day, currency pairs exhibit varied degrees of activity and volatility based on the active traders present on the market at any particular moment. But knowing the Forex sessions allows us to determine which currency pairings are most active when.
For instance, the GBP/USD and EUR/USD pairings, which exhibit significant liquidity and volatility, are the most active during the overlap between the New York and London session. However, during the Sydney session, these combinations are less choppy and liquid.
The most popular Forex pairs to trade during the Sydney session are AUD/NZD, USD/CHF, AUD/JPY, GBP/USD, EUR/USD, and USD/JPY.
Best currency pairs for the Sydney session
Each currency pair in a Forex trading session has a different level of importance. The Australian and New Zealand dollars are the most volatile currencies during the Sydney session since it includes both countries. There is a lot of volatility in the USD and JPY currency pairs, while the optimal currency pair for you will depend on where you live and conduct your trading. It could be better for traders to trade these pairings.
The Australian Dollar, Japanese Yen, and New Zealand Dollar are some of the most popular currencies right now since they are available in important markets. The two best currency pairs to trade in the Sydney session are USD/JPY and AUD/USD, while there are many other options. They are well-liked because traders frequently seek to profit from their high levels of volatility.
This pair illustrates the rate of exchange between the US dollar and the Japanese yen, indicating how many yen are required to purchase one dollar. Since the two currencies are tightly correlated, the value of one can have an impact on the value of the other. This explains why the currency pair has a different interest rate than other currency pairs. Additionally, the most popular and liquid currency in the forex market is the USD/JPY currency pair.
Particularly on the forex market, the AUD/USD currency pair has recently overtaken all others as the most traded pair. It is a blend of currencies from two prosperous economies, notably America and Australia, which is one of the causes. This pair shows the exchange rate as well as how many US dollars are required to obtain one Australian dollar. It is now the most active trading pair and the ideal pair for day trading due to its high volatility, economic stability, and performance.
Best trading pairs for Sydney and Tokyo sessions
The Sydney and Tokyo session is a time frame during which both the Sydney and Tokyo sessions are active. Such overlap indicates a busy period when more participants are engaged. One of the finest times of the day to enter a trade is during this session since traders may anticipate greater liquidity and volatility. The Sydney and Tokyo overlap lasts from two to four in the morning (EST).
Despite being less turbulent than the US/London overlap, the Sydney and Tokyo Forex session nevertheless provides a trading opportunity. The Japanese Yen and the Euro are the two currencies that have the most effect during this session, making EUR/JPY the best currency combination to trade. During this session, you might also think about trading the AUD/USD. For those who enjoy tremendous volatility, a market overlap like this is the ideal time to trade.
Sydney trading session time
The forex market is open five days a week, 24 hours a day, during four distinct sessions with various trading hours. Investors can trade around-the-clock during the workweek from various locations of the world. Sydney’s trading day begins at 22:00 GMT and ends at 6:00 GMT (opening time – 5 pm EST and closing time – 2 am EST). At this point, the trading day officially starts.
Despite being the smallest market, Sydney experiences a lot of activity when the Forex market reopen on Sunday at 12 because investors and dealers are looking to trade again after the weekend break. In the winter, this session is busiest from 10 p.m. to 2 a.m. The beginning and closing times of the forex session alter depending on the season because in countries that observe daylight savings time changes, market hours shift in March, April, October, and November.
What factors impact currency pairs during the Sydney session
Politics, economic data, and overnight adjustments in interest rates by central banks are the main basic factors influencing currency pairs.
- Interest rates: It is the responsibility of central banks to ensure monetary and financial stability. Therefore, in order for this to occur, they must have an impact on interest rates. The demand for the currency in question may rise if interest rates rise over night.
- Politics: Instability can be brought about by changes in policy, trade conflicts, corruption scandals, and elections, which are promptly reflected in the FX market. The current administration may introduce measures that have a favorable or negative impact on the economy.
- Economic Data: Economic releases provide traders with information on the state of the economy. The non-farm payrolls, the inflation rate, retail sales, and the GDP can all be affected by the reports.
- Volatility: Traders typically hold large stakes in less volatile currencies while holding smaller positions in more volatile ones. Volatility can be caused by shifts in political stability, unanticipated changes in interest rates, and a change in the forecast for the economy.
You should find some valuable information on the Sydney Forex session and the currency pairs traded there in this guide. Because of its low volatility, this session is avoided by many traders, but you can develop effective trading techniques to take advantage of the opportunities it presents. To reduce losses and boost profits, select the top pairings for the Sydney session and pay attention to the ideal trading periods. Make sure you use a trading strategy that suits your personality and as always, ensure you have sensible forex money management in place.
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