The Forex market is open 24 hours a day... from Monday morning in Sydney, Australia (their local time) until Friday afternoon in New York (in terms of NY local time). It would be more accurate to say that the currency markets trade 24/5 (24 hours, 5 days per week), not 24/7. However, even with that considered, Forex traders need to know that not every hour of the day is equal.
There are four major financial centers in the world that make up the majority of the daily currency trading volume. The majority of each of these cities' individual impact on the Forex market are centered around their respective banking hours, which are approximately 8:00am to 5:00pm in each of their local time zones.
This produces a cyclical daily pattern of market conditions as each market: opens, progresses through its lunch hours, and then (generally) overlaps with another market's opening hours as it draws toward its closing hour.
This concept is especially important to day traders since the market conditions during a typical Tokyo and Sydney sessions are very distinctly different from those of the New York and London (and Frankfurt) sessions. The daily peak hours for Forex trading volume and liquidity are the hours during which London and New York sessions overlap.
In terms of Eastern Time (GMT+5, the New York City time zone that the American media revolves around), the four major financial centers' market hours are:
5pm to 2am: Sydney, Australia
8pm to 5am: Tokyo, Japan
3am to 12pm: London, UK
8am to 5pm: New York, USA
Check timeanddate.com for a conversion to your local time zone.
One hour before the London open is the Frankfurt open. Though much smaller, it still often causes significant price action on many major pairs ahead of the London open.
NOTE: Summer/Daylight Savings Time Change Warning: For simplicy, we've listed the above times since they are accurate most times of year, but keep in mind that England changes to British Summer Time on a different date than when the United States changes to Daylight Savings Time. The weeks in between will shift the above hours from both perspectives. So for a more universally accurate picture, always look for the period of 8am to 5pm (8:00 to 17:00) in the local time zone of each session according to current summer time status, then convert that time to your current local time. That is the most technically accurate session time.