Forex trading is a 24-hour market, and it is divided into several trading sessions based on major financial centers around the world. These sessions overlap to some extent, creating continuous opportunities for trading. Here are the primary Forex trading sessions:-
Sydney Session: The Sydney trading session starts the Forex market week. It begins at 8:00 AM local time (AEST/AEDT) and overlaps with the Tokyo session. It’s a relatively slow session with lower volatility, as it corresponds to the opening of the Asian market.-
Tokyo Session: The Tokyo session is the second session to open and is known for its liquidity. It begins at 8:00 AM local time (JST) and overlaps with both the Sydney and London sessions. Some of the major currency pairs involving the Japanese Yen (JPY) are particularly active during this time.
London Session: The London trading session is often considered the most significant in terms of trading volume and volatility. It starts at 8:00 AM GMT and overlaps with both the Tokyo and New York sessions. Many important financial institutions are headquartered in London, making this session a hub for Forex trading.
New York Session: The New York session is the last to open and is characterized by high liquidity. It starts at 8:00 AM EST (Eastern Standard Time) and overlaps with the London session. This overlap period is especially active and is often when the most significant price movements occur.
Overlapping Sessions: The overlap between different sessions, particularly the London and New York sessions, is a key trading period. It typically occurs between 8:00 AM and 12:00 PM EST, when both sessions are active. This is when trading activity is at its peak, and traders can take advantage of increased liquidity and volatility.
Weekend Gaps: Note that Forex trading is continuous during the trading week, but there is a gap during the weekend when all the major markets are closed. This can result in price gaps when the market opens again on Monday.-
It’s essential for Forex traders to be aware of these forex trading sessions and their overlaps because trading during active sessions can provide better trading opportunities and more significant price movements. Additionally, traders should consider the economic calendar and major news releases, as they can greatly impact currency prices, especially during the overlap periods of trading sessions.
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