Forex Market Sessions
Forex trading is an altogether a totally different beast as compared to stock trading. One of the major differences between the forex and stock markets is that forex markets are open 24 hour, 5 days a week while stock markets have fixed timings. For example New York Stock Exchange (NYSE) is open from 9:00 AM to 4:00 Pm. You can only trade stocks at NYSE during this time.
This continuous 24 hour trading at the forex markets is something quite novel for many new traders. Forex is traded Over the Counter (OTC) meaning there is no Central Exchange. Forex market is a global market. When one center is opening, another center is closing. This is very important for a new forex trader to understand.
As there is no open and close of the forex market, many new traders get confused and dont know when the best time when major price action takes place is? So they sit in front of the computer all the time and in the end simply exhaust themselves losing their stamina. A clever way is to divide the 24 hour day into three 8 hour sessions.
Divide each session into two by using 4 hour charts. Since only three major money centers are responsible for most of the turnover in the forex markets, this will help you to see each regions risk appetite and make your trading day more manageable.
The three major money centers that affect the forex markets everyday are namely: Asia, London and New York. We will call our three trading sessions, the Asian, the London and the New York Session.
Asian Session: Most of the turnover in this market session is handled by Sydney, Tokyo, Hong Kong and Singapore. Main players are the commercial exporters and the respective central banks. Since most of these central banks are in competition with one other, the price action during this session is jumpy and unsustainable.
London Session: London is still the forex capital of the world with deep and highly liquid forex market. Paris, Geneva and Frankfurt also are players in this session. The moves that originate in this session are very important keeping in view the amount of money needed to move a market this deep. These moves give you a lot of information about the market sentiments and positions.
New York Market Session: New York is second to London. Both New York and London overlap in the morning when New York is opening and London is closing. This is the best time of the day for savvy traders to trade as there is a lot of price action during this time.
The following table gives important times of the day that any forex trader needs to know: 00:00 GMT-Sydney Opens. 11:00 GMT-London opens. 15:00 GMT- London becomes very active. 17:00 GMT- London is active and New York opens. 18:00 GMT- London and Europe closes. 19:00 GMT- New York and Chicago getting ready for a close!
This overlap between London and New York is the time when major price action takes place. There is lot of volatility in the market and you can make many pips. London is the trend setter in both forex and fashion. - 23208
This continuous 24 hour trading at the forex markets is something quite novel for many new traders. Forex is traded Over the Counter (OTC) meaning there is no Central Exchange. Forex market is a global market. When one center is opening, another center is closing. This is very important for a new forex trader to understand.
As there is no open and close of the forex market, many new traders get confused and dont know when the best time when major price action takes place is? So they sit in front of the computer all the time and in the end simply exhaust themselves losing their stamina. A clever way is to divide the 24 hour day into three 8 hour sessions.
Divide each session into two by using 4 hour charts. Since only three major money centers are responsible for most of the turnover in the forex markets, this will help you to see each regions risk appetite and make your trading day more manageable.
The three major money centers that affect the forex markets everyday are namely: Asia, London and New York. We will call our three trading sessions, the Asian, the London and the New York Session.
Asian Session: Most of the turnover in this market session is handled by Sydney, Tokyo, Hong Kong and Singapore. Main players are the commercial exporters and the respective central banks. Since most of these central banks are in competition with one other, the price action during this session is jumpy and unsustainable.
London Session: London is still the forex capital of the world with deep and highly liquid forex market. Paris, Geneva and Frankfurt also are players in this session. The moves that originate in this session are very important keeping in view the amount of money needed to move a market this deep. These moves give you a lot of information about the market sentiments and positions.
New York Market Session: New York is second to London. Both New York and London overlap in the morning when New York is opening and London is closing. This is the best time of the day for savvy traders to trade as there is a lot of price action during this time.
The following table gives important times of the day that any forex trader needs to know: 00:00 GMT-Sydney Opens. 11:00 GMT-London opens. 15:00 GMT- London becomes very active. 17:00 GMT- London is active and New York opens. 18:00 GMT- London and Europe closes. 19:00 GMT- New York and Chicago getting ready for a close!
This overlap between London and New York is the time when major price action takes place. There is lot of volatility in the market and you can make many pips. London is the trend setter in both forex and fashion. - 23208
About the Author:
Mr. Ahmad Hassam is a Harvard University Graduate. He is interested in Options and Forex Trading. Discover a revolutionary new Forex Robot.
posted by X - Men @ 9:48 AM
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