Forex Market Hours in Malaysia

Forex Market Hours in Malaysia
.13 May 2024
author avatar image Andreas Thalassinos

Table of Contents

Introduction

The foreign exchange market, also known as Forex, has a daily turnover of more than $7.5 trillion, making it the largest financial market in the world. It provides ample opportunities to retail traders like no other market in the world. With just a smartphone and an internet connection, trading can be started with as little as $5. However, it is crucial to understand the rules of the game before getting started. This guide is aimed at those who wish to begin trading Forex from the comfort of their own homes in Malaysia. 

While the forex market is open for business 24/5, that is, twenty-four hours a day, five days a week, it does not mean you should trade at any time. The time of the day could have a significant impact on your profitability. It is essential to consider the times of day when you engage in trading to determine whether you will make a profit. So, what is the best time to trade the forex market in Malaysia? This article will explore the nuances of the forex market opening hours in Malaysia, offering valuable insights and tactics for optimizing your trading opportunities.

Forex Market Open Time in Malaysia

Did you know that trading activity and liquidity levels can change dramatically depending on the opening and closing times of major financial centers (i.e., Sydney, Tokyo, Frankfurt, London, New York) worldwide? It’s important to stay informed about these fluctuations to make the most of your investments. The forex market is open 24/5 and offers ample trading opportunities during the 8:00 am to 5:00 pm GMT window. Trading is not limited to certain hours, making it easy to trade at any time of day. However, market performance varies throughout the day, and it’s essential to understand when the market is slow, active, or super-active to spot the best time to trade. 

Malaysia’s Time Zone and Market Hours¬†

Since 1981, Malaysia has adopted the GMP+8 timezone to facilitate trade and communication with partner countries. Malaysia shares the same timezone as the Philippines, China, Taiwan, Hong Kong, Macau, Singapore, Western Australia, Brunei, Irkutsk (Russia), Central Indonesia, and most of Mongolia. The Malaysian forex market typically opens at 9:00 am local time (GMT+8) on Monday and closes at 5:00 am (GMT+8) on Saturday. 

The forex market in Malaysia offers four primary trading sessions, each of which provides ample opportunities to invest. Whether you prefer the Sydney, Tokyo, London, or New York sessions, there is always a chance to enter the market.

Trading sessions timetable displaying the corresponding trading hours for Malaysian traders

Why Market Liquidity is Important

It is not uncommon for stock traders to express their disappointment regarding the inadequacy of market liquidity, which inhibits their ability to purchase or sell shares at a desired price and time. While this may be true in small stock markets, the situation in the foreign exchange market is quite different. Of course, the ease of buying and selling assets without significantly impacting the price is known as market liquidity. 

Therefore, Malaysian traders must understand that high liquidity trading hours are necessary for easy buying and selling and lower costs. In the forex market, high liquidity is observed during overlapping trading sessions.

What are the Major Trading Sessions

When two trading sessions overlap, it leads to higher market liquidity, resulting in more efficient order execution, tighter spreads, lower costs, and more trading opportunities. The forex market in Malaysia is quite active, with several major trading sessions overlapping during trading hours. This presents an excellent opportunity for Malaysian traders to participate in the forex market and take advantage of potential trading opportunities. Below are the major trading sessions:

Sydney Session: The Sydney, or the Australian session, opens at approximately 6:00 am Malaysian time and runs until 3:00 pm. It offers trading opportunities in AUDUSD, NZDUD, USDJPY, AUDJPY, and AUDNZD.

Tokyo Session: The Asian session, also known as the Tokyo session, runs from approximately 8 am to 5 pm and offers trading opportunities in AUDUSD, NZDAUD, USDJPY, and AUDJPY.

London Session: The London Session, also known as the European session, opens at approximately 4:00 pm and closes at 1:00 am. It offers plenty of opportunities in EURUSD, GBPUSD, EURGBP, GBPJPY, GBPAUD, and EURJPY.

New York Session: The New York session, also known as the American session, starts at approximately 9:00 pm and ends at 6:00 am. It offers many opportunities in EURUSD, GBPUSD, AUDUSD, NZDUSD, USDCAD, and USDCHF.

What is the Best Time to Trade Forex in Malaysia

Table displaying the different trading session in forex trading. Namely, the London session, the New York session, the Sydney session and the Tokyo session.

As a Malaysian trader, you can get the most out of Forex trading by taking advantage of the narrow bid-ask spreads during session overlaps. The ideal time for this is between 9 pm and 1 am Malaysian time when the London and New York sessions overlap. During this time, all currency pairs, indices, and commodities are highly active.

Another active trading session is between the Sydney and Tokyo sessions. You can exploit this overlap between 8 am and 3 pm Malaysian time and take advantage of numerous opportunities. It’s worth noting that many primary trends begin during this overlap, making it a great time to invest. Many opportunities arise during the Sydney and Tokyo sessions that overlap in AUDUSD, NZDUSD, USDJPY, AUDJPY, NZDJPY, and AUDNZD.

EUR/USD (Euro/U.S. Dollar)

The EUR/USD currency pair is highly traded and considered one of the most liquid pairs in the forex market. It witnesses a significant level of liquidity during the London and American trading sessions, especially during the overlap of these two sessions. Traders and investors often keep an eye on the EUR/USD pair due to its high level of activity and potential profitability.

USD/JPY (U.S. Dollar/Japanese Yen)

The currency pair of USD/JPY is one of the most actively traded pairs in the forex market. Malaysian traders expect significant volatility and liquidity during the Asian and American sessions. The overlap of these two sessions is particularly noteworthy as it often leads to increased trading opportunities.

GBP/USD (British Pound/U.S. Dollar)

The GBP/USD currency pair is among the most actively traded pairs, especially during the London and New York trading sessions. This pair experiences high liquidity and volatility, particularly when these two trading sessions overlap. In other words, traders can expect more significant price movements and trading opportunities during these times.

AUD/USD (Australian Dollar/U.S. Dollar)

The AUD/USD currency pair experiences notable trading activity during the Asian and European sessions, displaying higher levels of volatility and liquidity when these two sessions overlap. As a result, traders from Malaysia are advised to take into account these market opening times and liquidity patterns while formulating their trading strategies for particular currency pairs.

What is the Best Time to Avoid Trading Forex in Malaysia

Trading Forex in Malaysia during the release of high-impact news, weekends, and holidays is generally not advisable due to increased volatility and liquidity risks. High-impact news releases, such as economic data or geopolitical events, can trigger sudden and drastic price movements, making it difficult to predict market direction accurately. During national and bank holidays, forex markets can experience thin trading volumes and erratic price fluctuations, amplifying the potential for slippage and widening spreads. Moreover, without the presence of major market participants, traders may find it challenging to execute trades at desired prices, increasing the likelihood of losses. Therefore, it’s prudent for forex traders in Malaysia to exercise caution and avoid trading during these periods to mitigate unnecessary risks and preserve capital.

Additionally, leaving trades open during the weekend is another risk, as many geopolitical situations may develop that could negatively impact your balance. Malaysian traders should be aware of this and manage their trades accordingly.

Conclusion

Aspiring Malaysian traders know that having a good understanding of the market movements is crucial for success. It is important to learn when to trade and avoid trading to maximize the potential returns and minimize the risks. In the forex market, this knowledge is beneficial since it is open 24 hours a day, five days a week. In Malaysia, the best time to trade Forex is determined by a combination of two factors – when the market is most active and when it is more liquid. The overlap of the different trading sessions offers ample opportunities to Malaysian traders. Therefore, traders should aim to capitalize on the best trading hours and avoid the periods when the market is unstable and dormant. By doing so, they could increase their profit margins and reduce the chances of losing their capital. 

author avatar image
Andreas Thalassinos

Experienced educator with a demonstrated history of working in the financial services industry. Skilled in Technical Analysis, Market Risk, Asset Management, Stock Market, and Trading Systems. Strong professional with a MSTA by Society of Technical Analysts (UK), CFTe and MFTA focused in Master of Financial Technical Analysis from International Federation of Technical Analysts (USA).