One of the best features of the forex market is that it is open 24 hours a day. This is because trading in the forex market encompasses the exchange of all currencies all over the globe, which means that the market is functioning whenever a financial market is open anywhere in the world.
The start of trading is marked by the open of the Sydney market on a Monday and it ends when the New York session closes on a Friday. In between, traders are able to enter and exit forex trades whenever they want to, as there is a seamless transition from one market session to another.
In a forex trading day, there are three major sessions wherein most traders are concentrated: Asian session, European session, and U.S. session.
The Asian trading session takes place when Australian and Asian markets are open for trading. Sydney market hours or Tokyo financial market hours are included in this trading session. This is why Asian currencies, such as USD/JPY and yen pairs, and Oceanic currencies, such as NZD/USD and AUD/USD enjoy higher liquidity in the Asian session. Economic figures from New Zealand, Australia, and Japan are also usually reported around this time.
The European session comprises the London exchange and the banking hours of European markets. Around this time, it is the European pairs that are most actively traded and therefore enjoy more price action. These are EUR/USD, GBP/USD and USD/CHF. Yen crosses of European currencies, namely EUR/JPY and GBP/JPY, are also active during the European session. During this forex trading session, the euro zone, United Kingdom, and Switzerland often release their economic data.
Lastly, the U.S. session includes American and Canadian markets. Because of that, all dollar pairs are actively traded in this session while the U.S. economic reports are also printed around this time. Most major currencies such as USD/CAD, EUR/USD, GBP/USD enjoy high trading activity during the U.S. session.
There are also overlaps between these trading sessions as one market opens while another is about to close. During these overlaps, there is a higher number of traders who are actively entering and exiting trades, which means there's more liquidity and price action during these hours.
During these times also, some traders are getting ready to close shop and book profits, which means that there is potential for reversals or bounces during session overlaps. This is why some day traders or scalpers prefer to wait for trading session overlaps to catch some quick moves off key inflection points.
The start of trading is marked by the open of the Sydney market on a Monday and it ends when the New York session closes on a Friday. In between, traders are able to enter and exit forex trades whenever they want to, as there is a seamless transition from one market session to another.
In a forex trading day, there are three major sessions wherein most traders are concentrated: Asian session, European session, and U.S. session.
The Asian trading session takes place when Australian and Asian markets are open for trading. Sydney market hours or Tokyo financial market hours are included in this trading session. This is why Asian currencies, such as USD/JPY and yen pairs, and Oceanic currencies, such as NZD/USD and AUD/USD enjoy higher liquidity in the Asian session. Economic figures from New Zealand, Australia, and Japan are also usually reported around this time.
The European session comprises the London exchange and the banking hours of European markets. Around this time, it is the European pairs that are most actively traded and therefore enjoy more price action. These are EUR/USD, GBP/USD and USD/CHF. Yen crosses of European currencies, namely EUR/JPY and GBP/JPY, are also active during the European session. During this forex trading session, the euro zone, United Kingdom, and Switzerland often release their economic data.
Lastly, the U.S. session includes American and Canadian markets. Because of that, all dollar pairs are actively traded in this session while the U.S. economic reports are also printed around this time. Most major currencies such as USD/CAD, EUR/USD, GBP/USD enjoy high trading activity during the U.S. session.
There are also overlaps between these trading sessions as one market opens while another is about to close. During these overlaps, there is a higher number of traders who are actively entering and exiting trades, which means there's more liquidity and price action during these hours.
During these times also, some traders are getting ready to close shop and book profits, which means that there is potential for reversals or bounces during session overlaps. This is why some day traders or scalpers prefer to wait for trading session overlaps to catch some quick moves off key inflection points.
About the Author:
If you can't decide which forex trading session you should participate in,you should take a look at which currencies are active during these times Check out this great post>.
No comments:
Post a Comment