Forex trading is a global market that operates 24 hours a day, five days a week. The currency market is the most liquid financial market in the world, with an average daily trading volume of $5.3 trillion. The forex market is a decentralized market, which means that it doesn’t have a physical location, but instead, it operates through a network of computers and communication systems. The currency market is open 24 hours a day, but why is the volume high during certain parts of the day?
Forex trading volume is the total amount of money that is traded in the currency market during a specific period. The forex market is active 24 hours a day, but the trading volume is not the same throughout the day. The forex market is divided into four major trading sessions: the Sydney session, the Tokyo session, the London session, and the New York session. Each of these trading sessions has its own characteristics, and the trading volume varies during each session.
The Sydney session is the first trading session of the day, and it begins at 10:00 pm GMT and ends at 7:00 am GMT. The Sydney session is relatively quiet compared to the other sessions because it is the smallest trading session in terms of volume. The trading volume during the Sydney session is around 4% of the total volume of the forex market.
The Tokyo session is the second trading session of the day, and it begins at 12:00 am GMT and ends at 9:00 am GMT. The Tokyo session is known for its volatility because it overlaps with the Sydney session and the London session. The trading volume during the Tokyo session is around 21% of the total volume of the forex market.
The London session is the third trading session of the day, and it begins at 8:00 am GMT and ends at 5:00 pm GMT. The London session is the most active trading session because it overlaps with the Tokyo session and the New York session. The trading volume during the London session is around 38% of the total volume of the forex market.
The New York session is the fourth trading session of the day, and it begins at 1:00 pm GMT and ends at 10:00 pm GMT. The New York session is the second most active trading session because it overlaps with the London session. The trading volume during the New York session is around 19% of the total volume of the forex market.
The forex market is a 24-hour market, but the trading volume is not equal throughout the day. The trading volume is influenced by many factors, including economic data releases, news events, and market sentiment. The trading volume is higher during the overlapping trading sessions because there are more traders participating in the market.
The trading volume is also affected by the time of day. The trading volume is higher during the opening hours of each trading session because traders are reacting to the news and events that occurred during the previous trading session. The trading volume is lower during the closing hours of each trading session because traders are closing their positions and preparing for the next trading session.
In conclusion, the forex market is a global market that operates 24 hours a day, five days a week. The trading volume is not equal throughout the day, and it is influenced by many factors, including economic data releases, news events, market sentiment, and the time of day. The trading volume is higher during the overlapping trading sessions because there are more traders participating in the market. The trading volume is an important indicator of market liquidity, and it is used by traders to make informed trading decisions.
