What Are Forex Trading Sessions? A Complete Guide

In foreign exchange, industry time is very precious.  The forex market is open 24 hours a day from Monday to Friday, but that does not mean that you should trade all along the day.  To become a good forex trader you must follow the volatility read in the market and understand when the liquidity is at its peak. Visit multibank group brokers

 The volatility in the market varies from time to time depending on the trading sessions in the foreign exchange industry.  So if you want to make use of this volatility you must understand the different trading sessions. It will help you to establish the best time to trade forex and the best forex assets to trade. 

What Are The Different Trading Sessions In Foreign Exchange Market?

 There are primarily 4 trading sessions in the foreign exchange market, namely the Sydney session, Tokyo session, London session and New York session.  In the financial market, the Sydney and Tokyo sessions are also known as the Asian sessions. That is why we can primarily hear about 3 trading sessions- the Asian trading session, the London trading session and the New York trading session. 

 Let us get a complete overview of these 3 trading sessions so that you can make the right decision about trading time and trading assets.

Asian Trading Session: The Asian trading session starts with the opening of the Sydney market.  The Sydney market opens at 12:00 hours GMT.  Though the market is referred to as the Sydney market,  in actual sense it is the time when the New Zealand financial market starts working. The Asian market ends at 8:00 hours GMT With the Tokyo session.

The Asian trading station has thin liquidity in the market; therefore the currency pairs are usually treated within a range. The thin liquidity also refers to the fact that the currency pairs are traded with a wider spread. The early hours of the Asian trading sessions are the busiest, which means most of the trading takes place in the early hours.  Japanese yen, Australian dollars and New Zealand dollars are the most popular currencies to be traded in this session. 

London Trading Session: The London trading session opens with the closing of the Tokyo trading session.  That means the London trading session opens at 8:00 hours GMT.  To be precise this is the busiest trading session of all, which alone comprises 32% of the entire trading amount.  As London is one of the biggest financial hubs, it is referred to as the European financial centre. The busiest activity closes at 1600 hours GMT.

So are you thinking why this is the busiest trading session? the answer is because of the volatility and highest liquidity it offers to the forex traders. All the major currencies in the world meet the biggest movements during the London trading session.  The highest liquidity also indicates that most currencies are traded with thin spreads.  The best currencies to trade in this session are the euro and pound sterling. 

New York Trading Session: This trading session opens at 1300 hours GMT overlapping with the London trading session. This trading session closes at 2100 hours GMT. The New York trading session also shows busy activity, especially during the overlapping hours with the London trading session. 

The U.S. dollar is the most traded currency in this session and it is one of the most influential currencies in the foreign exchange market as well.  The high liquidity and volatility also feature thin spreads in trading most assets. However the beginning of the trading session might be pretty busy, but in the later hours, the volatility and liquidity start to decrease. In this session, all the major currency pairs are traded with equal enthusiasm. But the US dollar is the cue provider in this session. 

The Best Time To Trade:

That reader can take the ultimate call on when is the best time for them to trade. it is completely up to traders, Which trading session they find the most suitable for their business. The traders’ time availability, time zone, and trading style for making the decision of choosing the right trading session for them.

If you want to start trading in a low-volatile environment, an Asian trading session will be best for you.  But if you want to go for the high price movements and highest volatility, the London trading session or the early hours of the New York trading session will suit you the best. The overlapping hours have high volatility so you may target that session as well.  Know more dubai broker

Conclusion

There is no restriction and the foreign exchange market is open 24/7 a day. So you can make your move at any time of the day with your preferred assets.