Forex is open for 24 hours and five days a week, so anyone can trade whenever they want. But if you’re aiming to make a successful trade, you must remember that the Forex market is not always suitable for trading. Because even if it is open 24 hours a day, the market is not always active. Sometimes it just fades away.
Forex market works maintaining four sessions or periods. The sessions are named- Tokyo, Sydney, New York, and London Session. Each has a different schedule. Skilled traders first choose a period and then enter the market accordingly. Now let us know about the time frame of the sessions-
Sessions’ opening and closing schedule (According to GMT):
- Sydney: During summer- 09:00PM to 06:00AM and in winter 10:00PM to 07:00AM
- Tokyo: During both summer and Winter- 12:00PM to 09:00AM
- London: During summer- 07:00AM to 04:00PM and in Winter 08:00AM to 05:00PM
- New York: During summer- 12:00PM to 09:00PM and in Winter 01:00PM to GMT 10:00AM
What happens when a session opens?
The opening of the session means an increase in the number of traders in a particular region. For example, when the Tokyo session begins, traders in Asian countries start trading in the market. Or we can say it another way; the Tokyo period starts when other Asian countries, including Japan, start their activity in the market. So it is clear that as soon as a period begins, the number of trades in the market rushes up, and the price fluctuates a lot.
What is Session Overlap?
When a session opens while another one is running, it is called session overlap. You will notice that in summer, the Tokyo and London sessions overlap from 1:00 pm to 3:00 pm, and the London and New York sessions overlap from 6:00 pm to 10:00 pm. And right at these times, the price fluctuates the most. Feel free to visit https://www.home.saxo/en-sg/products/commodities and know more about the trading hours. As you learn more, you will be able to deal with the overlapping session in a more structured way.
When should you trade?
It would be best if you started when the market remains active. You can make a profit only when there are enough trades take place. From the above discussion, you must have realized that it is wise to trade during the opening of a period. But we suggest you trade during an overlap because market volatility reaches its highest during this period. But first, you need to choose which pair you want to trade. And then select your period accordingly.
We can say very simply that when a period starts, the possibility of specific pairs is created. As the JPY and the AUD pair movement increases a lot during the Tokyo session, it would be wise to trade in this pair.
Again, London is the busiest of all sessions. And the more active the session is, the more its liquidity is. And higher liquidity allows you to trade in any pair. But choosing the major pairs will bring you profit. Major pairs mean – GBP/USD, USD/CHF, USD/JPY, EUR/USD, etc.
Which days of the week is better to trade?
If you research the statistics of price movement, you will notice that activity increases more in the middle days of the week. The most pips movement is seen on Tuesday, Wednesday, and Thursday. It is often seen that on Mondays there are bank holidays in many places.
Moreover, on Monday, there is less news released, or traders reduce their trades as they cannot decide where the trend will take in the new week. On the other hand, many people do not trade on Friday afternoons because the market will be closed from the next day. So, it is better to trade from Tuesday to Thursday.
Now select your preferred session, choose your desired currency pair. We hope you already have understood which time frame is suitable for trading. This schedule is a part of your trading plan. So, the better your time management is, the more successful the plan will be.