Tag: Trading sessions

Categories
Forex Market

Which Global Trading Session is the Worst? The Answer Just Might Surprise You…

FWhile the forex market offers the opportunity to trade 24 hours per day, smart traders know that certain times just aren’t prime for trading. Professionals make the most of their time by trading during the best market sessions, then they choose to sleep and take care of other matters during lame market sessions or other […]

FWhile the forex market offers the opportunity to trade 24 hours per day, smart traders know that certain times just aren’t prime for trading. Professionals make the most of their time by trading during the best market sessions, then they choose to sleep and take care of other matters during lame market sessions or other […]

FWhile the forex market offers the opportunity to trade 24 hours per day, smart traders know that certain times just aren’t prime for trading. Professionals make the most of their time by trading during the best market sessions, then they choose to sleep and take care of other matters during lame market sessions or other special times when the market just isn’t ideal for trading. So, which times are best for forex trading and when should you avoid trading altogether? Stay with us to find out.

The Best Times to Trade

The major time zones dominate the forex market: Asia, Europe, and the United States. When time zones overlap, it creates one of the best market environments for forex traders. Overlapping time zones occur:

  • In the New York and London sessions (12 pm GMT – 5 pm GMT)
  • In the London and Asia sessions (8 am – 9 am GMT)

If you trade during these times, you can take advantage of the market’s high liquidity, volatility, and the best price action. Trading can also pick up on certain days and lag on others. On Mondays, after the overlapping of the New York and London sessions, things tend to pick up and the market reaches its peak mid-week, around Wednesday, before slowing back down in time for the weekend.  

The Worst Times to Trade

If you feel like you need to trade as much as possible to be productive, you’ll be happy to know that there are times when the market should simply be avoided. 

  1. Certain weekdays: To be specific, Monday mornings start off slow, before picking up after the New York and London sessions overlap. It’s a good idea to start trading around this time, rather than first thing Monday morning. After the market reaches its peak mid-week, it also tends to slow down around Thursday and Friday, causing many traders to finish up for the week before the London sessions ends on Friday. 
  2. Weekends: The market is incredibly slow on weekends for pretty obvious reasons, as most traders take some time off on Saturday and Sunday. If you can’t stand to sit around all weekend, you could use the time to check news data and check other factors that might affect the market in the following week. 
  3. When major news releases are expected: You can use an economic calendar to keep an eye out for major news releases. These events can cause the market to become extremely unpredictable, which causes many traders to simply avoid trading altogether during these times. These events often include financial reports, economic data, political updates, etc. Keep in mind that some of these events will have a bigger impact on the market than others. 
  4. During certain holidays: Just like with weekends, most forex traders take certain holidays off from trading, therefore, the market slows down, and there just isn’t much action. Christmas is one of the main holidays where traders are not working, alongside New Year’s Eve and day, and certain holidays during the summer, like Independence Day, Memorial Day, Labor Day, and so on. 

Summary

All trading sessions were not created equally, and savvy traders know when NOT to trade. The market is best for trading when certain sessions overlap and from Monday afternoon through the middle of the week. It’s a good idea to close out positions on Fridays and to refrain from opening any new positions until after the weekend has passed. You should also avoid the market if major news releases are expected to hit and during big holidays, like Christmas, summer holidays, and New Year’s.

Categories
Forex Course

16. Trading The London Session

Introduction 
The London session, also referred to as the European session, is the session where a significantly high amount of trading happens. The London session opens at 3:00 AM

Introduction 
The London session, also referred to as the European session, is the session where a significantly high amount of trading happens. The London session opens at 3:00 AM

Introduction 

The London session, also referred to as the European session, is the session where a significantly high amount of trading happens. The London session opens at 3:00 AM EST and is rigorously traded for eight hours straight.

There are several big financial institutions in Europe. So, the trading volume in the FX market during this session is extremely high. Due to this, many retail traders also show massive participation during this session. Hence, the London session was named the forex capital of the world.

There are thousands of transactions every minute during this session. As per sources, 30% of all forex transactions are executed during the European session.

In the previous lesson, we saw the average pip movement in the Tokyo session for some majorly traded currencies. The average there came to around 53. Now, coming to the London session, the average is much higher than the Tokyo session. The number stands at 72. During this session, the FX majors, as well as minors, tend to move by large amounts.

The below table gives you an idea of the average pip movement for some intensively traded currencies.

More about the London Session

As mentioned, London is considered as the Forex capital of the world. The majority of the volume in the market comes during the London session. Hence, there is high liquidity during this session.

The London session opens during the closing time of the Asian market. During the Asian session, the market usually goes through a consolidation phase. But, when London opens its shops, the consolidation comes to an end, and the market begins to move in a trend state. However, during the middle of this session, the market slows down and begins to consolidate. This could perhaps be due to the fact that the traders are waiting for the New York market to open. It has also been observed that the market reverses its direction at the end of the session. This could mean that the large players are booking their profits.

As far as trading in this lesson is concerned, this is the ideal session for the trend traders. A trend trader can analyze the markets during the Asian session and gear up to take trades when the London market opens.

The best currencies to trade during the London session

It is clear from the table that we can trade any pair in the market. There is sufficient liquidity in most of the currency pairs. Specifically speaking, one can keep a close eye on pairs such as EURUSD, GBPUSD, USDCHF, USDCHF, GBPJPY, EURJPY, etc. Moreover, as there is a heavy volume of trading in these pairs, the spreads here are very tight.

Thus, this brings us to the end of this lesson. In the next lesson, we shall discuss the New York session. For now, test your learning by taking up the quiz below.

[wp_quiz id=”46939″]
Categories
Forex Course

14.The Different Sessions In The Forex Market

Introduction
The forex market is traded all across the world. In fact, it is open 24 hours. And these markets are traded in countries when their national markets are

Introduction
The forex market is traded all across the world. In fact, it is open 24 hours. And these markets are traded in countries when their national markets are

Introduction

The forex market is traded all across the world. In fact, it is open 24 hours. And these markets are traded in countries when their national markets are open. There are about four major countries where vast lumps of cash flow in and out of the forex market and thereby keeping it very liquid and volatile. To trade professionally, having an idea of the different markets open and close is vital. Hence, in this lesson, we shall be going over the various sessions in the forex market.

Forex market trading sessions

Though all countries trade in the forex market, there are a few countries where the massive volume of trading takes place. The 24 hours trading in the forex market is divided into four sessions. These four sessions are given as follows:

• The Sydney Session 

• The Tokyo Session

• The London Session

• The New York Session

Moreover, the open and close of these sessions vary based on the season as well. One session falls between March/April to October/November, and the other starts from October/November and goes up to March/April. The former is the spring/summer session, and the latter is the Fall/Winter session.

Trade timings during Spring/Summer (in the US)

Trade timings during the Fall/Winter (in the US)

Note that the time represented is the local time (US) and the EST, and is different from every country’s standard time. However, the standard market timings for most countries lie within 7:00 AM and 6:00 PM.

Furthermore, there is an overlap between sessions. That is, during the overlap, the Forex market is traded by two regions simultaneously. For example,

The New York and the London session has an overlap between 8:00 AM – 12:00 PM EST

The Sydney and the Tokyo session overlaps between 7:00 AM and 2:00 AM

And the London and the Tokyo session overlaps between 3:00 AM to 4:00 AM.

These overlapping sessions are essential for traders because at that time is when more liquidity and volatility are created in currency pairs. This is so because traders from two markets operate simultaneously.

Hence, this completes the lesson on the different sessions in the forex market. And in further lessons, we shall discuss each one of the sessions in detail. For now, test your learning of this lesson by taking up the quiz below.

[wp_quiz id=”46553″]