Forex trading is a 24-hour market, which means it is always open for trading. This is because forex trading takes place across different time zones, with markets opening and closing at different times. As a result, forex traders have the freedom to trade at any time of the day or night, depending on their individual preferences and trading strategies.
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 are named after the major financial centers where trading takes place, and each has its own unique characteristics.
The Sydney session starts at 10 PM GMT on Sunday and closes at 7 AM GMT on Monday. It is the first major trading session of the week and is characterized by low volatility and low trading volumes. This is because most of the major financial centers are closed during this time, and traders are mostly from Australia and New Zealand.
The Tokyo session starts at 12 AM GMT and closes at 9 AM GMT. It is the second major trading session of the day and is characterized by high volatility, especially when the Bank of Japan announces its monetary policy decisions. The Tokyo session is also known for its strong correlation with the Australian dollar, as many Japanese companies have investments in Australia.
The London session starts at 8 AM GMT and closes at 5 PM GMT. It is the most important trading session of the day and is characterized by high trading volumes and volatility. The London session accounts for nearly 30% of the total daily trading volume, and most of the major currencies are traded during this time. The London session also overlaps with the Tokyo session for a few hours, which creates a lot of volatility in the markets.
The New York session starts at 1 PM GMT and closes at 10 PM GMT. It is the last major trading session of the day and is characterized by high trading volumes, especially when economic data is released. The New York session accounts for nearly 20% of the total daily trading volume, and it overlaps with the London session for a few hours, which creates a lot of volatility in the markets.
Apart from these four major trading sessions, there are also other trading sessions that overlap with the major sessions. These include the Frankfurt session, which overlaps with the London session, and the Singapore and Hong Kong sessions, which overlap with the Tokyo session. These overlapping sessions create a lot of volatility in the markets and present opportunities for traders to make profits.
In conclusion, forex trading is a 24-hour market, with trading sessions starting and ending at different times across different time zones. The four major trading sessions are the Sydney session, the Tokyo session, the London session, and the New York session, each with its own unique characteristics. Traders have the freedom to trade at any time of the day or night, depending on their individual preferences and trading strategies. However, it is important to note that trading during high volatility periods can be risky and requires proper risk management techniques.
