Forex or foreign exchange market is a decentralized market where currencies are traded globally. The market is open 24 hours a day, five days a week, and is accessible to anyone with an internet connection. Forex traders buy and sell currencies in pairs, meaning they exchange one currency for another. The price at which they exchange the currencies is known as the exchange rate. Understanding when pairs are traded is crucial for forex traders as it affects the liquidity and volatility of the market.
The forex market is open 24 hours a day, five days a week, starting from Monday morning in Sydney until Friday evening in New York. The market is divided into four major trading sessions: the Asian session, the European session, the North American session, and the Pacific session. Each of these sessions has its unique characteristics and trading volume, and traders should consider them when planning their trades.
The Asian session, also known as the Tokyo session, begins at 7 pm EST and ends at 4 am EST. It is the first session to open after the weekend, and liquidity is generally low during this time. The major currencies traded during the Asian session are JPY, AUD, and NZD. The Asian session is characterized by low volatility, and traders often use this time to analyze the market and plan their trades for the day.
The European session, also known as the London session, begins at 3 am EST and ends at 12 pm EST. It is the most active session, with high trading volume and volatility. The major currencies traded during the European session are EUR, GBP, and CHF. The European session overlaps with the Asian session, which leads to increased trading activity and liquidity. Traders often use this session to trade news releases and take advantage of the high volatility.
The North American session, also known as the New York session, begins at 8 am EST and ends at 5 pm EST. It is the second most active session, with high trading volume and volatility. The major currencies traded during the North American session are USD and CAD. The North American session overlaps with the European session, which leads to increased trading activity and liquidity. Traders often use this session to trade news releases and take advantage of the high volatility.
The Pacific session, also known as the Sydney session, begins at 5 pm EST and ends at 2 am EST. It is the least active session, with low trading volume and volatility. The major currencies traded during the Pacific session are AUD, NZD, and JPY. The Pacific session overlaps with the Asian session, which leads to increased trading activity and liquidity.
Traders should consider the trading sessions when planning their trades as it affects the liquidity and volatility of the market. High liquidity means that there are many buyers and sellers in the market, and traders can easily enter and exit trades. High volatility means that the market is moving quickly, and traders can make significant profits or losses in a short period.
In conclusion, forex trading pairs are traded 24 hours a day, five days a week, and are divided into four major trading sessions. Each of these sessions has its unique characteristics and trading volume, and traders should consider them when planning their trades. Understanding when pairs are traded is crucial for forex traders as it affects the liquidity and volatility of the market.
