COURSE 4: Learning how FOREX market operates

When to trade Forex? Trading sessions

Now that you get the general idea about what the Forex market is, you may wonder when is the best time during the day to get on board. You already know that the trader’s profits are made up by the pip movement – that is, how far the price of an asset goes after opening a position. So it helps greatly to find out at what time your favorite assets become more active, or volatile – speaking in a trader vernacular.

 

The key will be your understanding of the trading sessions, meaning the schedule of Forex market activities in various parts of the world and their time zones.

 

Here are some important details that can explain how Forex market operates and when is the best time to trade a certain currency pair.

FOREX open hours

There are 4 trading sessions - each of them signifies opening of the Forex market in different regions of the world. These are Pacific, Asian, European and North American sessions. As each region has its own time zone, the sessions come one after the other, overlapping at certain periods. This is why Forex trading is happening almost non-stop: 24 hours per day, Monday to Friday. On weekends, with a rare exception, there are no trading activities on Forex.

 

Schedule of the trading sessions

Opening in Wellington (New Zealand) and closing in Chicago (the USA), FOREX trading sessions follow each other closely in this single geographical chain.

 

Here’s what their schedule looks like (GMT hours):

 

  • Pacific: 09:00 p.m. - 06:00 a.m.
  • Asian: 11:00 p.m. - 07:00 a.m.
  • European: 07:00 a.m. - 05:00 p.m.
  • North American: 04:00 p.m. - 10:00 p.m.

 

Pacific region is considered the least active in terms of FOREX trading volume and it’s the North American session when the traders’ activity usually peaks.

How do I choose the FOREX trading session for me?

Knowing how long each of the trading sessions last, you can accommodate your own schedule without having to sit in front of the computer 24 hours a day.


Pick the currency pairs that appeal to you most and find out during which trading session they show the highest volatility.

Pacific and Asian FOREX sessions

The major FOREX players involved during this time are Japan, China, Australia and New Zealand (because it’s daytime in Asia and Oceania). Consequently, Pacific and Asian sessions are best for trading currency pairs with Japanese yen, Australian and New Zealand dollar.

 

It’s the time when the FOREX market is normally quiet. However, big moves can happen when important news breaks out, most often at 00:00 - 00:30 a.m. GMT.

European FOREX session

The European FOREX session takes over after the Asian session. These are important hours for trading - as Europeans begin their working day and large banks, as well as small speculators, enter the market.

 

Usually the assets show substantial pip movement throughout the European session. Important news releases are aired from 09:00 a.m. until 10:00 a.m. GMT. The currency pairs offering the biggest potential to lock in profits are EUR/USD and EUR/JPY.

 

London, a key financial centre of the world, is a notable participant in this session. Therefore, also consider the pairs containing the British pound: GBP/CHF, GBP/USD, GBP/JPY, GBP/AUD, GBP/CAD, GBP/NZD. 08:00 - 09:00 a.m. GMT is the time to check out the news that may have a strong impact on the market.

American FOREX session

When American players step into the arena, the busiest time for traders begins. FOREX activities with all currency pairs involving USD increase at once.  The market volume is on the rise, as the well-heeled speculators and large hedge funds are joining in.

 

Daytime is when the trading activity peaks. Traditional US news reports are being released and the traders are certainly keeping an eye on them, managing their FOREX deals.

 

Near the closing of the American session, FOREX market typically slows down its movement. Except for the days when the Federal Reserve System reveals some important data. It happens around 07:00 p.m. GMT, so the traders get a reason to stay tuned a little longer.

What’s the next thing I should know about FOREX?

Feeling eager to start trading FOREX? Well, you might be - now that you know

how the market operates and when it is most active with regard to some or other currency pair.

 

But hold on until you see the following courses we have prepared. They will give you more practical guidance on the trader’s tools and set you up for the real success!