Trading sessions on Forex
Forex market operates 24 hours a day 5 days a week. However, even on weekends Forex trade does not stop, as currency exchange is in high demand everywhere and always. Nevertheless, such rhythm does not require your full-time presence in front of the PC. Currency trading has peak hours, when you have a higher chance to earn, and calm hours, when it is better to refrain from opening deals.
To make your Forex trading more effective, it is important to clearly understand the principles of work, to know the time of trading sessions, including even the lunch breaks at the world stock exchanges. Thus the Forex working day can be divided into four major trading sessions: the Pacific, the Asian, the European, and the North American.
Trades start on Monday morning and last until the Friday noon. The banks to begin are those of New Zealand (Wellington) and Australia (Sidney). However, Wellington does not show high trading volumes, so the real trades are activated in Sidney. The sessions start at 9 a.m. local time and ends at 5 p.m. Most often trading here includes the national currencies such as AUD and NZD. It should be mentioned, that the lowest trade volumes are observed in the Pacific region.
Then the stock exchanges of Japan (Tokyo), Singapore and China (Hong Kong) join the trading day, which is called the Asian session on Forex. Here, the trading hours are also the same: since 9 a.m. until 5 p.m. local time. Currency pairs related to the yen as well as EURUSD are the ones most actively traded during the Asian session. By the session closing time, the Bank of Japan joins the trading, thus the volumes for the instruments such as USDJPY, EURJPY, GBPJPY, GBPCHF, EURUSD increase considerably. Thus, for example, in Moscow it is possible to work with Tokyo till noon and with Singapore till the lunch break.
The European session opens at 8 a.m. and closes at 4p.m. local time. The first to start work are the banks of Paris, Zurich and Frankfurt; then the initiative is taken by the trading center in London and it is here, when the trading volume surges. The strongest activity lasts for two or three hours at the European session, after that the dealers have a lunch break and the work at the European stock exchanges decelerates gradually. The most traded pairs include such currencies as GBP, EUR and CHF.
The North American session closes the day. When the dealers of the USA enter the trade, the London lunch break finishes, and they continue to make deals. The majority of analysts consider the North American session to be the most aggressive one; nevertheless, according to the volume of the operations conducted, it gives way to the European session. The main part of the deals is made, when it is day time in London and morning time in New York. When the stock exchanges in Europe close their doors, the chief center of trading is New York. Here, the pairs including USD are traded most actively.
It should be noted, that the less active stage of trades is the time when the North American session closes and the Pacific in Wellington opens. Then Sidney joins the day and the cycle renews. In this way, the trading sessions on Forex allow traders from all over the world work within the session following the time zones, which gives a chance to distribute their forces and concentrate on certain stages.