Forex trading is a 24-hour market that operates across different time zones. As a result, the market is divided into four trading sessions: the Sydney session, the Tokyo session, the London session, and the New York session. Each session has its own unique characteristics and trading opportunities.
The Sydney Session
The Sydney session opens at 10:00 pm GMT and closes at 7:00 am GMT. It is the first session to open in the forex market and is often referred to as the Pacific session. This session is relatively quiet compared to the other sessions since it overlaps with the end of the New York session and the start of the Tokyo session.
During the Sydney session, the Australian dollar (AUD) and the New Zealand dollar (NZD) are the most actively traded currencies. Traders usually focus on the AUD/USD and NZD/USD pairs since they are the most liquid.
The Tokyo Session
The Tokyo session starts at 12:00 am GMT and closes at 9:00 am GMT. It is also known as the Asian session and is the second busiest session after the London session. During this session, the Japanese yen (JPY) is the most actively traded currency.
Traders usually focus on the USD/JPY and EUR/JPY pairs since they have the highest volatility. The Tokyo session is also known for its news releases, which can cause significant market movements.
The London Session
The London session opens at 8:00 am GMT and closes at 5:00 pm GMT. It is the most active session and is often referred to as the European session. During this session, the euro (EUR), the British pound (GBP), and the Swiss franc (CHF) are the most actively traded currencies.
Traders usually focus on the EUR/USD, GBP/USD, and USD/CHF pairs since they have the highest liquidity and volatility. The London session is also known for its news releases, which can cause significant market movements.
The New York Session
The New York session starts at 1:00 pm GMT and closes at 10:00 pm GMT. It is the last session to open in the forex market and is often referred to as the North American session. During this session, the US dollar (USD) is the most actively traded currency.
Traders usually focus on the EUR/USD, GBP/USD, USD/JPY, and USD/CHF pairs since they have the highest liquidity and volatility. The New York session is also known for its news releases, which can cause significant market movements.
Conclusion
In conclusion, each trading session in forex has its own unique characteristics and trading opportunities. Traders should be aware of the different time zones and market hours to take advantage of the best trading opportunities. It is also important to note that news releases can cause significant market movements, and traders should be prepared for these events.
