Trading the forex clock is important when you’re on the market. If you know how to look and maximize the forex clock, high returns are guaranteed.
The different forex trading sessions let you access the market anytime and anywhere. But this doesn’t mean that any time is a good time to do it.
Different forex sessions operate throughout the day, each with unique price actions that can impact your trade.
Lesson Highlight
- Trading the overlapping sessions opens traders to profitable opportunities due to increased liquidity and high volatility.
- The London trading session is the most significant in the forex clock, with an average of 43% of trading activities happening during this session.
Why Trade the Time
While there’s no ultimate rule that tells you the best time to gain on the forex market, there is one effective way to ensure that you’re riding the market flow.
“What’s that?” you might ask.
Well, you must trade the overlapping session because this is when the forex activities become active.
When you’re on the forex market, the best advice you’ll receive is to trade when the market is most active. During these hours, your position will enjoy high liquidity and volatility to get the best result.
Remember, you want to enter a position on periods with high trading volume and volatility to get larger returns and take advantage of the market movement. However, expect no returns or even market movement when you enter a position during periods of low activities.
Major Forex Trading Sessions
To maximize the peak forex trading hours, you must know what the 24-hour forex day looks like.
The forex day consists of four main trading sessions: one from Tokyo, London, New York, and Sydney.
Have a quick glance at the side-by-side comparison of major trading sessions’ open and close times:
Tokyo Session
The Tokyo trading session is the first session that opens in the forex market every day. Also known as the Asian trading session, it is among the best sessions to trade forex.
It begins at 12:00 AM UTC and ends at 9:00 AM UTC (9:00 PM - 6:00 PM JST).
While it has lower liquidity and volatility than the other major sessions, it can provide you with a clear entry and exit level because it usually follows the asset’s support and resistance.
Also, the Tokyo session is known for its quiet yet moving nature. With this, you can thoroughly manage your trade’s risk and reward ratio.
The most traded currency pairs during this trading hour are:
- USD/JPY
- EUR/JPY
Note: 20% of daily activities happen during the Tokyo session.
London Session
The London session’s opening hours entail the high trading traffic. In fact, this is the most traded session among the four, accounting for an average of 43% of daily trading activities.
The London session starts at 7:00 AM and ends at 4:00 PM UTC (8:00 AM - 5:00 PM GMT).
Unlike the Tokyo session, the asset often breaks out from its support and resistance during the London session. If you’re a day trader, you’ll most likely gain from its volatility and liquidity.
Here, almost all the currency pairs will experience rapid movement from time to time. But most especially the:
- EUR/USD
- GBP/USD
- USD/CHF
New York Session
The New York session is the last session to open among the biggest financial centers globally. It starts at 1:00 PM and closes at 10:00 PM UTC (8:00 AM - 5:00 PM EST).
During this period, the forex market experiences a spike in liquidity and volatility. Many forex traders opt to trade this session to take advantage of profitable opportunities.
All major currency pairs are heavily traded during this session, but more on the EUR/USD and GBP/USD when the London/US sessions overlap.
Note: The London/US sessions overlap for 4 hours, bringing even more trading volume and liquidity to the market.
Sydney Session
The Sydney session is another Asian trading session that welcomes the start of the new forex day. It starts at 10:00 PM UTC and ends at 07:00 AM UTC (7:00 AM - 4:00 PM AEST).
Compared to the other major forex sessions, this trading session has the lowest volatility and liquidity. That’s because most Western traders are asleep, resulting in low trading volume and activities.
With this, day traders tend to shy away from entering and selling positions during the Sydney session.
The most traded currency pair during this trading period are the:
- AUD/USD
- NZD/AUD
Weekend Trading: Is It Possible?
Unfortunately, no one can trade forex during the weekend. That’s because all central banks are closed during this period. As you know, these entities account for almost 93% of trading activities.
Depending on where you are, the market opens on Sunday at noon and ends on Friday at noon.
But the question is, “Does currency value stop moving during the weekend?”
No, the currency still moves even when the market is closed. That’s why there’s a gap in your chart’s candlestick when you get back in your trading device after the weekend.
What you could do is monitor the market and strategize your trade for the coming trading week.
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