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3 Major Forex Trading Sessions - Forex Function

3 Major Forex Trading Sessions

Last Update: 17 December,2016
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1. Asia Pacific


Every week, the forex trading market, starts from Sydney session opening at 08:00 local time on Monday i.e. 21:00 GMT on Sunday, followed by Tokyo session opening 2 hours later at 23:00 GMT. Japan is the third largest currency trading center in the world. The Asian Pacific markets enjoy the opportunity to see the live action before everybody else in the world. Despite Australia and Japan there are many other countries, which participate actively in the forex market and also provide liquidity is Singapore, Hong Kong, China, Russia and New Zealand.


The Asia Pacific trading session, when compared with the European and American session, provides very thin liquidity and the price action are the lowest i.e. the price tends to move in limited ranges. The only currency, which seems to be very active, is all the currency pairs associated with the Japanese Yen, other than that high trading activity is mostly seen at the times of economic news and data releases.


Overall, the Asian Pacific session is the calmest and stable session, traders who have a trade strategy for sideways and range bounded markets can benefit the most from this session.

2. European


As soon as the Asia Pacific business day comes to an end, European markets open at 07:00 GMT and all the traders are get set ready to continue the trading activity ahead. In Europe, and, in fact, in the entire forex world, London is the heart of all foreign exchange currency trading activities; in order to decide the current market trend, every market participant evaluates the market activity in this session. In Europe, after United Kingdom, other countries, participating actively in the Fx market and also provide liquidity is Germany and France.


London being a key financial center, the trading activity (price action, liquidity & volatility) in the European session is the highest i.e. almost all major bulk forex deals are executed in this European trading session, as so it is natural that fresh trends initiate and/or the ongoing trends gets a boost in this session. It happens sometimes that in the noon hours, due to lunch time and all, the trading activity declines, but it again gets charged up, as soon as it overlaps with the New York session.


European session has an advantage of being in between the Asian and American session and as so it has the highest trading activity (price action, liquidity & volatility) in this session; mostly we can trade any pair in this session, but if you want to trade with the currency pairs having the tightest spreads, then trading the top 4 major currency pairs i.e. EURUSD, GBPUSD, USDJPY, and USDCHF is the ideal choice.

3. American


The last session of the day is this American trading session; it starts at 13:00 GMT and overlaps with the European session for the first 4 hours, these 4 hours are the best market hours for the day as the London session is active, and also the United States session is active i.e. the center of the forex market meets with the major currency i.e. the U.S. Dollar (Approx. about 85% of all forex trades involve the dollar). In simple words, these 4 hours have everything, highest liquidity and major currency pair’s local participants. After this overlapping session, trading activity decreases, as Asian and European markets, both are closed.
We can trade almost any currency pair in the first four hours of this session, but after that, trading any currency pair from the huge list of currency pairs associated with the U.S. Dollar is the best choice.



The Weekend Break

Yippie! this is the time to enjoy and have leisure activities. Cheers


Bottom Line


As we now know the correct time to trade the correct currency pair, we can utilize this information in building our trade strategy and get the best benefits possible.


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