Trading Session – When is the Best Time To Trade?
After learning and understanding all about the basics of forex such as: the definition of Forex, Why you should trade forex, and who comprises the forex market, it’s now the best time to learn when you you can trade and when you should not.
Forex market is indeed open 24 hours a days, but it doesn’t mean that the market is active all of the time. Again, investing your money in forex market will allow you to get great benefits, profits and revenues.
In forex, you can always make money when the market moves up, and you can also make money when the market moves down. Interesting isn’t it?
The catch is, it would be very difficult to make money when the forex market stays the same and does not move at all.
It is not uncommon for the forex market to stay the same for quite some time.
Anyway, in this lesson, I will help you determine the best times of day to trade. Let’s take a look at these several trading sessions.
It is imperative for each one of us to look at what a 24-hour day in the forex world looks like. This is prior to looking at the best times to trade.
There are 4 major trading sessions in the Forex market. You need to remember them one by one. Take a look at the pointers below.
1. The Sydney Trading Session
2. The Tokyo Trading Session
3. The London Trading Session
4. The New York Trading Session
The tables below show the opening and closing times for each trading session:
Summer ( Approximately April – October)
Winter ( Approximately October – April )
Note: Actual open and close times are base on local business hours. Some countries shift to and from daylight savings time resulting to some time discrepancies during the months of October and April. Also, the day within each month that a country may shift to and from daylight savings time varies as well.
Just by looking at the table, you will notice that there is a period of time where two trading sessions are open at the same. This happens in between each trading session. During winter season, the Tokyo trading session and London trading session overlap from 3:00-4:00 am EDT. On the other hand, the London trading session and the New York trading session overlap from 8:00 am-12:00 pm EDT.
When two markets are open at the same time, expect more volume. This is the reason why these times are considered to be the busiest times during the trading day. Also, during those times, all the market participants are wheeling and dealing. This means that there is more money transferring from one hand to another.
If you are looking at the Sydney open, you will notice that the time shifts two hours. It’s quite confusing right? In this scenario, you would actually think that Sydney’s open would have to only move one hour when the U.S. adjusts for standard time. However, you have to bear in mind that when the U.S shifts one hour back, Sydney moves forward by one hour. This is because seasons are opposite in Australia and U.S. You need to remember this especially if you plan to trade during that time period.
Now, let’s take a look at the average movement of the major currency pairs during each trading session.
According from the table above, you will notice that the European trading session normally provides the most movement.
For you to be able to understand each trading session, you need to take an in depth look at each of the trading session. Also, it is imperative to learn the overlapping sessions during those periods.
Proceed to the Next Lesson: Tokyo Session
Back to previous lesson: When can You Trade Forex?
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