Forex or foreign exchange market is the largest and most liquid financial market in the world. It operates 24 hours a day, five days a week, with daily trading volume exceeding $5 trillion. The forex market is decentralized, which means it has no physical location or central exchange. Instead, it operates through a network of banks, brokers, and other financial institutions.
The forex market is divided into three major trading sessions: the Asian, European, and North American sessions. Each session has its unique characteristics, trading hours, and currency pairs that are most active.
The Asian session, also known as the Tokyo session, starts at 12:00 AM GMT and ends at 9:00 AM GMT. It is the first trading session of the day and is characterized by low volatility and liquidity. The currency pairs that are most active during this session are the Japanese yen (JPY), Australian dollar (AUD), and New Zealand dollar (NZD).
The European session, also known as the London session, starts at 7:00 AM GMT and ends at 4:00 PM GMT. It is the most active session and has the highest trading volume. The currency pairs that are most active during this session are the euro (EUR), British pound (GBP), and Swiss franc (CHF).
The North American session, also known as the New York session, starts at 12:00 PM GMT and ends at 9:00 PM GMT. It is the last trading session of the day and is characterized by high volatility and liquidity. The currency pairs that are most active during this session are the US dollar (USD), Canadian dollar (CAD), and Mexican peso (MXN).
It is important to note that the forex market is open 24 hours a day, five days a week, but not all currency pairs are active at all times. The trading volume and volatility of each currency pair depend on the trading session and the economic news releases.
For example, during the European session, the EUR/USD pair is the most active, but during the Asian session, the JPY/USD pair is the most active. Traders who want to trade a specific currency pair should be aware of the most active trading session for that pair.
In addition, some trading sessions overlap, which means that there are two trading sessions open at the same time. The most active overlap is between the European and North American sessions, which occurs between 12:00 PM GMT and 4:00 PM GMT. This overlap is characterized by high trading volume and volatility, making it an ideal time for traders to enter and exit trades.
In conclusion, the forex market is open 24 hours a day, five days a week, with each trading session having its unique characteristics, trading hours, and currency pairs that are most active. Traders should be aware of the most active trading session for their preferred currency pairs and take advantage of the trading session overlaps to maximize their profits.
