What is EST? Its Role and Relation to GMT

EST (Eastern Standard Time) is the standard time zone for the Eastern United States, commonly used in the stock and forex markets to determine trading hours.

During daylight saving time, EST shifts to EDT (Eastern Daylight Time) with a smaller time difference from GMT.

What is EST?

EST is the abbreviation for Eastern Standard Time. This time zone is based on the Mean Solar Time of the 75-degree west meridian at the Greenwich Observatory, and is used in the eastern part of the United States, parts of Canada, and several other regions in the Western Hemisphere. 

It is 5 hours behind Coordinated Universal Time (UTC-5) during standard time. In the summer, during daylight saving time (DST), EST changes to Eastern Daylight Time (EDT), which is UTC-4.

How EST Works and Its Relation to GMT

EST can be easily understood using the following simple formula:

Local Time = GMT – 5 hours

This means that when it is 12:00 PM GMT, it is 7:00 AM in areas using EST. During the summer, the EST time zone shifts to EDT (Eastern Daylight Time). At that point, the time zone becomes GMT-4, helping save energy by adjusting the time of day. 

Examples of the Time Difference Between EST and Other Time Zones:

• EST (GMT-5): New York, Washington D.C., Toronto.
• GMT (GMT+0): United Kingdom, Ireland.
• GMT+7: Vietnam, Thailand, Cambodia.
• GMT+8: China, Singapore.

This time zone helps countries, cities, or regions within it synchronize their time, facilitating economic activities, transportation, and international communication. 

The Role of EST in International Sectors

The role of Eastern Standard Time (EST) in international sectors is significant for various activities across different sectors, including finance, business, technology, and communications

• Finance and International Trading: Like GMT, EST plays an important role in determining trading times in financial markets, especially in the FOREX89 market. The trading sessions in New York, operating under EST, are among the most significant and have a global impact on the financial markets.
• International Flight Schedules: International flights between areas using EST and other regions must synchronize their schedules with this time zone to avoid confusion.
• International Events and Meetings: Just like GMT, EST is also used to schedule meetings and international events, allowing participants from different time zones to join on time.

How is EST Used in the Financial Markets, Especially Forex?

In financial markets, especially in hotforex (foreign exchange) trading, EST is widely used to reference the timing of various market activities and trading sessions. It helps to:

• Define the opening and closing of market sessions.
• Time key economic data releases and financial events.
• Plan trading strategies around market volatility and liquidity.

Examples:

Trading Session	Opening Time (EST)	Closing Time (EST)	Closing Time (EST)	Closing Time (EST)
Sydney Session	5 pm est	7:00 AM EST (next day)	10:00 PM GMT	12:00 PM GMT (next day)
Tokyo Session	6pm eastern	9:00 AM EST (next day)	11:00 PM GMT	2:00 PM GMT (next day)
London Session	7pm est	5pm est (next day)	12:00 AM GMT (next day)	10:00 PM GMT (next day)
New York Session	11 a.m. est	10:00 PM EST	4:00 PM GMT	3:00 AM GMT (next day)

For Forex traders, understanding EST and its significance in market timing is crucial for making informed decisions and managing risk effectively.

The Difference Between GMT and EST

There is a clear distinction between GMT and EST. GMT is the global standard time, unaffected by the seasons, and remains stable throughout the year. In contrast, EST is a specific time zone used in parts of the U.S. and Canada, and it may change to EDT during the summer.

In summary, EST plays a crucial role in synchronizing time in the Northeastern regions of the U.S. and Canada, particularly in financial trading, aviation, and international events. It helps countries and cities around the world communicate and collaborate easily without facing issues related to time zone differences. In the next article, readers can learn more about base currency.