Forex trading is a global market that operates 24 hours a day, five days a week. However, it doesn’t mean that the forex market is active during all those hours. The forex market operates in sessions, each with its own unique characteristics and trading hours. In this article, we will discuss the three primary forex sessions and their hours of operation.
The Asian Session
The Asian session is the first forex session to open, and it starts at 8:00 PM EST on Sunday and ends at 4:00 AM EST on Monday. This session is also called the Tokyo session because it is centered around the Tokyo financial center. Other major financial centers in the Asian session include Singapore, Hong Kong, and Sydney.
The Asian session is known for low volatility and low trading volume, especially towards the end of the session. This is mainly because European and American traders are yet to enter the market. During this session, the Japanese yen is the most actively traded currency, followed by the Australian dollar and the New Zealand dollar. The Asian session is ideal for traders who prefer a slow-paced market and those who trade the yen and other Asian currencies.
The European Session
The European session is the most active forex session, and it starts at 3:00 AM EST and ends at 12:00 PM EST. This session is also called the London session since it is centered around the London financial center. Other major financial centers in Europe include Frankfurt, Zurich, and Paris.
The European session is known for high volatility and high trading volume, especially during the first few hours of the session. This is mainly because it overlaps with the Asian session, making it the busiest forex session. During this session, the euro, pound sterling, and Swiss franc are the most actively traded currencies. The European session is ideal for traders who prefer a highly active market and those who trade the euro and pound sterling.
The American Session
The American session is the last forex session to open, and it starts at 8:00 AM EST and ends at 5:00 PM EST. This session is also called the New York session since it is centered around the New York financial center. Other major financial centers in America include Chicago and Toronto.
The American session is known for moderate volatility and high trading volume, especially during the first few hours of the session. This is mainly because it overlaps with the European session, making it a highly active forex session. During this session, the US dollar is the most actively traded currency, followed by the Canadian dollar and the Mexican peso. The American session is ideal for traders who prefer a moderately active market and those who trade the US dollar and Canadian dollar.
Conclusion
Forex trading is a global market that operates 24 hours a day, five days a week. However, it doesn’t mean that the forex market is active during all those hours. The forex market operates in sessions, each with its own unique characteristics and trading hours. The Asian session is known for low volatility and low trading volume, the European session is known for high volatility and high trading volume, while the American session is known for moderate volatility and high trading volume. Understanding the forex sessions and their hours of operation is crucial for traders who want to maximize their profits and minimize their risks.
