This lower liquidity allows for range bound trading strategies with greater use of indicators such as RSI.ĭay traders who like ranges, meaning buying at support and selling at resistance should consider trading the European currencies during the late US session into the Asian session (19:00-07:00GMT).ĭay traders who like breakouts and trends should consider trading when Europe comes online to when the Europe moves offline (08:00-17:00GMT). As mentioned previously, the liquidity during this time is relatively low as the US session has little/no affect.
Webinar has ended When is the best time to trade?ĭailyFX data has shown over the last 10 years, European currency pairs have shown greater success when traded during the 19:00 -11:00 GMT period. Notice the green dot on the previous chart around 08:00 ET (13:00 GMT) when US comes online and when the market has the Europe/US overlap, the average movement increases even further until London falls offline (denoted by the red dot) near 12:00 ET (17:00 GMT). Many of the transactions in New York occurs during the US/Europe overlap, with transactions slowing as liquidity dries up and European traders exit the forex market. The second largest trading market, New York handles approximately 16% of the world's forex transactions. Source: DailyFX Traits of Successful Traders research (2010-2012) US trading session The chart below illustrates this statistic based on the time of day - notice the increase that takes place as the European trading session begins at 03:00 ET (08:00 GMT). The onslaught of liquidity coming in from London can greatly increase the ‘average hourly move’ of major currency pairs such as EUR/USD. The large number of participants in the London forex market and the high value of the transactions makes the London session more volatile than the other two forex sessions.
Most of the world's largest banks keep their dealing desks in London because of the market share. London is the largest and most important forex trading session in the world, with roughly a 34% market share of the daily forex volume. Approximately 6% of the world's FX transactions are enacted in the Asian trading session. Tokyo is the first forex session to open, and many large participants use the trade momentum In Asia to develop their strategies and utilise as a gauge for future market dynamics. Noting the specific times of each trading session will assist forex traders in developing their trading strategies around this data. The forex market is seen as highly functional/dynamic during these trading sessions as major banks, institutions and retail traders are operational. What are the main forex trading sessions?Ĭustomarily, the forex market is divided into three market sessions: In this article, we will explore each of these forex market sessions including their key characteristics – forex time zones and how they affect trading. Understanding these different forex session times can improve the reliability of a forex trading strategy. Each major geographic market center can exhibit vastly unique traits and tendencies that can allow traders to effectively execute strategies at any time.Īlthough the forex market is the most liquid of all asset classes, there are periods whereby volatility is constant, and others subdued. There are three major forex trading sessions which comprise the 24-hour market: the London session, the US session and the Asian session.
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