There are three major forex trading sessions, namely the American session and the European session. The European session is also known as EET, or Eastern European Time. In winter, these times are GMT+2, and in summer, they are GMT+3. During the European and American hours, most foreign exchange trading takes place. This is when the trading spreads are lowest.
European session
There are several distinct trading hours in the currency markets. The Asian session is the first of the two, with the American session following. Traders from both continents come together during this time. European businesses trade with companies outside of the continent and vice-versa. The trading activity in these two sessions varies. The volumes of each currency pair will be different during each session, as will the volatility.
Trading in these markets is impacted by macroeconomic news and macroeconomic indicators. In addition to evaluating economic reports from the Bank of England and the European Central Bank, traders should keep an eye on important economic indicators coming from countries such as France, Italy, and Germany.
Asian session
The Asian session trading hours are the most active trading times of the day. Unlike the European and American sessions, this session has fewer participants. This means that liquidity is less available and the price of a currency will not move as quickly. Instead, the currency will be in a narrow range. Traders who base their strategies on fundamental analysis may decide to trade during the Asian session.
The Asian session has a lower liquidity level than the US and London sessions. This lower liquidity creates lower trading volumes, which reduces the likelihood of large moves outside of the trading range. The following chart shows the volatility levels outside of the Asian session:
New York session
The New York session is the longest trading day of the week and is dominated by US markets, with Canada and Mexico contributing to the trading activities. This session begins after the Asian session has ended and before the European session closes. It accounts for approximately 16% of the global forex volume. Traders should know about its trading hours before participating in this session. Moreover, it is important to keep in mind that the session overlaps with the Asian session in the morning, and has less activity near the closing bell.
Whether you’re a day trader or an intraday scalper, knowing the New York session’s trading hours is crucial to your trading strategy. By keeping an eye on the New York session’s trading hours, you can find entry levels and orderblocks for trades. Keep in mind, though, that the session time varies with exchanges, and may need to be adjusted. If you’re trading in a different exchange, make sure to check the time zone settings on your trading platform. Most of them default to a 12am New York session, but you can change it to fit your needs.
Evening session
Forex trading hours are determined by the economic activity of each currency pair. During certain periods, some currencies trade at a higher volume than others. The main reason for this is that some countries are open for business at certain times. For example, when Japan is open for business, it is likely to trade foreign currencies with other nations. It is also likely to exchange yen for domestic currency.
The European and American sessions overlap during these hours, increasing the volume and volatility of the markets. This overlap often makes for some of the most lucrative times to trade forex. However, traders should always be cautious during major events such as news releases or national holidays, because these events can cause volatility.
New York-London overlap
Forex trading is a global industry with numerous locations and trading hours. The New York-London trading hours overlap between 1:00 pm and 5:00 pm GMT, when the US Dollar and Euro are the most active currencies. The overlap between the two major markets can lead to greater price activity and volatility. If you’re a beginner or an experienced trader, it’s important to know the opening and closing times of the Forex markets so you can plan your trading strategies accordingly.
Forex trading during these two sessions overlap, and some forex pairs will experience a large amount of activity during the New York session, and a lesser amount during the London session. However, currency pairs tend to have greater liquidity when one or both of them are active. For example, USD/JPY will experience more activity during the US session than during the European session, but will be less active during the Asian session.
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