In
this lesson you are going to learn about different trading sessions. Earlier I
said Forex market is open 24 hours a day, but it is not always active in the
whole day. You already know that when market is moving up or down you can make
money but sometimes market does not move up and down and it is difficult to
make money while market is not moving. Don’t worry; in this lesson you are
going to learn what the best time to trade in Forex is and how it becomes best.
The
Forex market is consisting of four major trading sessions. Look at the picture
above. The sessions are Sydney session, the Tokyo session, the London session,
and the New York session. You can find market open and close times also in
above picture. Keep in mind that the time is not your local time it is GMT
time. If you know your time zone you can easily convert this to your local
time. If you are in somewhere having time zone of GMT +5.30 like India, the
opening time of London session is 7+5.30. That means 12.30 PM. One more thing I
need to tell you that this time is not fixed for entire year. There is a slight
change in market open and close times in summer and winter. Look at the table below.
You
need to know that summer is approximately April – October and the winter
is approximately October – April
Come back to the first figure again
Did
you noticed see that in there is a period where two sessions are open at the
same time? From 12:00- 16.00 GMT, the London session and New York session overlap, and also from 23:00-06:00
GMT, the Sydney session and the Tokyo session overlap. Actually this is the time that most of traders are
opening and closing their trades in Forex market. In other word those are the
busiest times in Forex trading because the volume of the market is very high
when two trading sessions are open at same time. Now look at the table below.
It shows the average PIP movement of the major currency pairs during
each Forex trading session. Now you must have a question. What is PIP?
Just forget about it I will explain it in next lesson. For now just consider
about the numbers in the table below.
Pair
|
Tokyo
|
London
|
New York
|
EUR/USD
|
76
|
114
|
92
|
GBP/USD
|
92
|
127
|
99
|
USD/JPY
|
51
|
66
|
59
|
AUD/USD
|
77
|
83
|
81
|
NZD/USD
|
62
|
72
|
70
|
USD/CAD
|
57
|
96
|
96
|
USD/CHF
|
67
|
102
|
83
|
EUR/JPY
|
102
|
129
|
107
|
GBP/JPY
|
118
|
151
|
132
|
AUD/JPY
|
98
|
107
|
103
|
EUR/GBP
|
78
|
61
|
47
|
EUR/CHF
|
79
|
109
|
84
|
If you look deeply at the table you
can observed that PIP movement in London session is higher compared to
Tokyo and New York sessions. Now we are going to learn some more about those
sessions.
Tokyo Session
If you go back to previous lesson you can see
that yen is the third most traded currency in Forex market. Sometimes Tokyo
session is also known as Asian session because Japan has the largest financial
capital in Asia. The opening time of Tokyo session is 12:00 AM GMT. Look at the
table below which shows the average PIP movement in the major currency pairs
during the Asian session.
Pair
|
Tokyo
|
EUR/USD
|
56
|
GBP/USD
|
54
|
USD/JPY
|
30
|
AUD/USD
|
65
|
NZD/USD
|
58
|
USD/CAD
|
39
|
USD/CHF
|
40
|
EUR/JPY
|
57
|
GBP/JPY
|
72
|
AUD/JPY
|
65
|
EUR/GBP
|
23
|
The values in the table are not absolute values. Those values were
calculated using past data from the Forex market.
Which Pairs Should You Trade in Tokyo session?
During this session when
news comes from Japan, Australia or New Zealand there could be good
opportunities for Forex traders and there is a large movement in the
pairs which consisting of JPY in one side. And also
don’t forget the economic power of China because the news come from china may
tends to create volatile movements in the Forex market.
Now let’s go to the London session.
London Session
This
is the most volatile session in Forex market so this is the most important
session which you need to pay more attention to the market. Because during this
session thousands of European businessmen making transactions every single
minute. As percentage it is about30% of all Forex transactions.
The table below shows the pip ranges
of the major currency pairs during London session.
Pair
|
London
|
EUR/USD
|
83
|
GBP/USD
|
82
|
USD/JPY
|
36
|
AUD/USD
|
60
|
NZD/USD
|
64
|
USD/CAD
|
66
|
USD/CHF
|
58
|
EUR/JPY
|
80
|
GBP/JPY
|
102
|
AUD/JPY
|
86
|
EUR/GBP
|
40
|
Which
Pairs Should You Trade in London session?
During this session you can trade
any pair because of the volume of trades take place in this session. But better
to stick with major pairs like EUR/USD, GBP/USD and
USD/JPY and also you can try yen crosses (specifically, EUR/JPY and GBP/JPY). You
need to keep in mind that this market is influenced by news come during this
session.
Then
we have New York session
New York Session
This session starts at 12 pm GMT. Since
US has one of major financial center you need to keep you will have to pay
attention on the news come from US which influence to the Forex market.
The table below shows the pip ranges
of the major currency pairs during New York session
Pair
|
New York
|
EUR/USD
|
77
|
GBP/USD
|
68
|
USD/JPY
|
34
|
AUD/USD
|
68
|
NZD/USD
|
62
|
USD/CAD
|
67
|
USD/CHF
|
56
|
EUR/JPY
|
72
|
GBP/JPY
|
77
|
AUD/JPY
|
71
|
EUR/GBP
|
36
|
Which
Pairs Should You Trade?
During
this session although you can trade any pair it is better to stick with major
and minor pairs and also you need to pay attention on the data released from
U.S.
I know you are confused now. Don’t
worry in the nest lesion I will tell the best time of the day to trade and best
days of the week to trade.
