Forex trading is a global market that never sleeps. It is a 24-hour market that allows traders to buy and sell currencies around the clock. However, not all trading hours are equal. There are certain times when trading activity is high, and other times when it is low. So, when does trading pick up on forex?
To understand when trading picks up on forex, it is important to know that the forex market is divided into four major trading sessions: the Sydney session, the Tokyo session, the London session, and the New York session. These sessions overlap at certain times, and this is when trading activity picks up.
The first session to open is the Sydney session, which starts at 10 pm GMT on Sunday and lasts until 7 am GMT on Monday. This session is relatively quiet, with low trading volumes and volatility. The reason for this is that the major financial centers in the world are closed on weekends, so there is little news or economic data to influence trading.
The Tokyo session starts at midnight GMT and lasts until 9 am GMT. This session is also relatively quiet, with low trading volumes and volatility. However, as the session progresses, trading activity starts to pick up, especially when the Asian financial centers open for business.
The London session is the most active session, and it starts at 8 am GMT and lasts until 5 pm GMT. This session overlaps with the Tokyo session for two hours, and this is when trading activity really picks up. The reason for this is that London is the financial capital of Europe, and many traders and investors use this session to trade the euro and the pound.
The New York session starts at 1 pm GMT and lasts until 10 pm GMT. This session overlaps with the London session for four hours, and this is when trading activity is at its highest. The reason for this is that New York is the financial capital of the world, and many traders and investors use this session to trade the dollar.
So, when does trading pick up on forex? Trading activity picks up during the overlapping periods of the major trading sessions. These periods are:
– The Tokyo/London overlap: 7 am GMT to 9 am GMT
– The London/New York overlap: 1 pm GMT to 5 pm GMT
During these periods, trading activity is high, and there is more volatility in the market. This makes it an ideal time for traders to enter and exit trades and take advantage of price movements.
It is important to note that trading activity can also pick up during major news events and economic data releases. These events can cause sudden spikes in volatility and trading volumes, and traders should be aware of them and adjust their trading strategies accordingly.
In conclusion, trading activity on forex picks up during the overlapping periods of the major trading sessions. These periods are the best times for traders to enter and exit trades and take advantage of price movements. However, traders should also be aware of major news events and economic data releases, as they can also cause sudden spikes in volatility and trading volumes.
