When can you Trade the Forex Market
The Forex market is highly complex, many active players here and there with their own mechanisms and laws for the development of the markets. How the entire system works, experienced analysts and scientists have long been trying to decipher completely but, only with limited success. For the individual trader, it is also very more effective for this reason to deal with the concerns. Amid other things, when can you trade the Forex market? First, the most vital news: in precept, the Forex market can be traded around the clock. But there are diversities, for instance regarding the conditions that can be use and liquidity. Practically speaking, the Forex market trading hours can be divided into 4 central sessions, based on the world’s dominant trading venues. This includes Sydney, where trade commences from a European context. Shortly consequently follows Tokyo. The London stock exchange is vital for Forex trading in Europe. And overseas, New York has its hat in currency trading.
Now that you understand that Forex markets overlap, you can start developing a strategy according to your currency options. Though the niche is narrow, this is the most profitable time for trading Forex online.
The Major FX Trading Centers
Asian Trading Session
The Sydney market opens at 22:00 GMT and officially markets the beginning of the Asian trading session. At 00:00 GMT, Tokyo joins and the Asian trading session increases in volume. Amid this session, the Yen is the largest heavily traded currency, followed by the Australian dollar and the New Zealand dollar.
European Trading Session
At 08:00 GMT, London opens for stock trading. At that time, Tokyo is still operating, but the overlap only lasts for an hour. The amount of market participants is massive when Europe and London are open and considerable activities take place. At this period, Asian traders close their positions, and the European traders open theirs. All currency pairs are exchanged amid the European session, volumes are high, and spreads are smaller. 38% of the total volume of operations is generated by the London market, higher than that of Japan and New York combined.
American Trading Session
At 13:00 GMT, the US trading session starts. Amid this trading session, approximately 19% of trading in all foreign currency trading takes place. There is 4 hours of overlap within the US trading session and the European trading session. It is between this period that the transaction volumes are the highest but these slow down when the European market closes. The US trading session generates heavy trading of all leading currency pairs.
In all markets, there are two remarkable trading sessions: morning and afternoon. With overlaps, the number of traders increases, the liquidity is higher, and the volume is larger. This implies that you are less likely to witness a slippage and spreads are reduced. According to national holidays in the United Kingdome or the United States Forex market conditions changes, as these are responsible for the highest transaction volumes.
Forex trading at the weekend
Since Forex trading does not require a physical location, trading on electronic platforms is easy. What is required is the presence of buyers and sellers which is aided by these trading platforms. It is best to refrain from holding open positions during weekends hours supposing you are a Day Trader. It is recommended to close all positions before the end of the day on Friday, before the closure of the US trading session. A cogent difference can occur amid the closing price Friday afternoon and the opening price on Sunday evening. The risks ingrained in the trading currencies over the weekend make it elusive to Day traders.
If you resolve to trade currencies over the weekends, do not forget to use a trading log to mark the closing prices. Make sure you understand the significance of the “margin” before entering a trade. Adjust the percentages to match your risk tolerance preferences.