Forex trading is popular among traders for its accessibility, liquidity, and, most importantly, 24*7 flexibility. It is one of the most efficient and seamless ways to dive into the trading and investing world and make genuine profits. While forex trading is slowly becoming popular among traders, it’s important to implement your best strategies as per forex trading sessions/time zones to get more edge in the industry.
Why you may ask. Well, even though the forex market is active round-the-clock, the trading activity differs as per time and location. In fact, traders believe the forex market is most active when the multiple time zones overlap. So, you can understand its worth.
When it comes to forex trading sessions, it’s primarily divided into three main zones. Let’s understand each of them in detail:
Note – Before you understand the forex trading sessions and enter the trading world, it’s recommended to do your research thoroughly. The more you will understand the basics and essentials of forex, the better for your profits/gains.
Not just forex, this approach is recommended for all types of trading, including the gold market. If you are interested in gold trading, do your research well and read a guide to Gold Trading before starting.
Asian Forex Session
Areas Included: China, Japan, Australia, Russia, New Zealand, etc.
Session Timing: 11:00 pm to 8 am (GMT)
You may have guessed it by the name already. The Asian forex session/Tokyo session is the time when the forex market for Asian countries (as mentioned above) is active.
When we talk about Asian forex sessions, it’s mostly involved with low liquidity and higher forex spreads. Additionally, you can expect high fluctuations, low volatility, and a quiet market. As these sessions have comparatively less noise, it’s the best time for beginners to manage their trades. Of course, the time frame has to be integrated with the right strategies to increase the odds of success in online trading. Only it will be a successful and effective strategy.
During the Asian session, there’s a time frame where the Asian market overlaps with the timing of the European session for a few hours. This particular time span is called the Tokyo-London overlap, and traders can expect decent volatility and high-end activity during the same. This is especially useful for those who are involved in the EUR/JPY pair.
European Forex Session
Areas Included: London, Geneva, Paris, Amsterdam, Frankfurt, etc.
Session Timing: 7:00 am to 4:00 pm (GMT)
European forex sessions are also called the London session. It ranks second among the most active forex sessions after North America. The session is known for its good liquidity, volatility, and low spreads. However, as you know, good things come at a cost. So, with more liquidity, you may witness more noise, competition with other traders, and uncertain fluctuations.
During the session, there is an overlap between the US and the European market, indicating the highest percentage of trade within the timeframe. Besides the US and European market pair, the Asian and European session also overlaps during the early hours.
Some of the best pairs to trade during the European forex session include EUR/USD, USD/JPY, and GBP/USD.
North American Forex Session
Areas Included: US, Canada, Mexico, South America etc.
Session Timing: 12:00 pm to 8 pm (GMT)
Also called the New York Forex session, the North American Forex session opens when the European session is still active and going strong. Initially, the market starts with high volatility and low spreads, which is ideal for traders. However, as noon approaches, the volatility witnesses a down-tick and an eventual consolidation phase.
In terms of volatility, the North American forex session lies between both Europe and Asian markets. That’s why it’s worth trying your trading practices during this session if you are a beginner. A good thing about this session is that even professionals can benefit from the same, thanks to the Europe and US market timing overlap.
As for the currencies that you can trade during the North American forex session, you can try currency pairs like EUR/USD, GBP/USD and USD/JPY.
Now that you know about the main forex trading sessions and time zones, it’s your turn to shine in the forex industry. Try to come up with an effective forex strategy and integrate it with the ideal trading sessions to get the best gains.