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- What is a Forex trading session?
- The relationship of currency pairs with sessions
- Schedule of Forex trading sessions in Moscow time
- Opening of the Asian session
- Opening of the American session
- Opening of the European session
- Opening of the Pacific session
- Which currency pairs trade best?
- Opening and closing of stock exchanges
- Sessions indicator for MT4
The Forex market operates in a virtual space, so its schedule is not limited by time frames.
It stops its work on Saturday-Sunday for the sole reason that most of the banks, funds and brokers that provide the exchange with liquidity do not work on these days.
On weekdays, Forex works around the clock and this time is conditionally divided into 4 trading sessions.
What is a Forex trading session?
A trading session is the time during which the main participants of the trading process in the Forex market work.
Approximately it lasts from 9 am to 6 pm. The time difference on different continents led to the fact that each of them formed its own trading session.
Traders from Sydney are the first to start trading on Monday, then the Tokyo people “wake up”, the baton is passed from them to the capital of Great Britain, and the trading day ends in New York.
The relationship of currency pairs with sessions
On Saturday-Sunday, trading is stopped, the working week on Forex begins at the opening of the session in Australia on Monday, and the end of trading takes place on the last working day of the week on the New York Stock Exchange.
When choosing a suitable session for work, a trader should take into account his location and the current day of the week. If he lives in Tokyo, then he can start work on Monday morning, and for residents of London, auctions begin on Sunday evening.
Often, in generalized tables, the time of trading sessions is indicated with reference to Greenwich Mean Time (GMT). This time system allows you to determine the trading time in any time zone.
For example, if a trader is located in Central Europe, then to determine the current session, he needs to add 1 hour in winter or 2 hours in summer to GMT time.
Some brokers consider the GMT standard obsolete and offer clients trading schedules in accordance with the UTC (Universal Coordinated Time) standard.
Despite the fact that the most active trades are conducted from 9.00 to 6 in the evening, this does not mean at all that the trader needs to stop working at exactly 18.00. Trading on Forex is carried out around the clock, just depending on the trading session that has begun, different currency pairs behave differently.
For example, during the Asian session, the yen is more active, at this time the majority of European investors are "sleeping", so the activity in the euro is reduced.
During European trading, the most volatile assets will include EUR. But American trading is considered the most active, since the US dollar is included in all major currency pairs.
Schedule of Forex trading sessions in Moscow time
For the convenience of traders from the post-Soviet space, the time of work at a particular trading session is tied to the time in Moscow. In winter it is 2 hours ahead of UTC time, and in summer it is 3 hours ahead.
Forex trading sessions by Moscow time operate in this mode:
- Asian - from 2 to 11.00 Moscow time.
- European - from 8.00 to 5 pm Moscow time.
- American - from 17.00 to 24.00.
- Pacific - from 10 pm to 6 am.
Opening of the Asian session
Asian trading begins at 2 am Moscow time, when the Tokyo Stock Exchange opens. The main actors at this time are the economic centers of Tokyo, Hong Kong and Singapore.
The trading volume at this time is quite small compared to the European and US markets, so the price changes slightly at this time. At the same time, the spreads for major currency pairs are slightly overestimated, and their liquidity is falling.
Most of all, pairs with currencies from the Asian region are traded at this time. The most popular at this time is the Japanese yen.
Opening of the American session
At 3 pm Moscow time, the New York Stock Exchange begins its work - this is considered the beginning of American trading.
In time, it is superimposed on European trading, so for a few more hours the market will experience high volatility of assets due to the increased trading volume.
The overlay lasts about 2 - 3 hours - it is at this time that the most active trading takes place, when the movement of the USD exchange rate affects all pairs that include the American currency.
From 17.00, the Chicago Stock Exchange comes into operation, and European trading ends, which leads to a decrease in activity, although trading is even more active than in the Asian session.
Opening of the European session
The Asian session has not yet ended, it has 1 hour left to work, but European banks are already starting to open, and European trading will start.
At this time, day traders who worked in Asia close their positions, and European day traders, on the contrary, open them, which leads to an increase in the number of traders simultaneously working on the market.
The main players in the European market remain the stock exchanges of Frankfurt, Paris and London. Recently, Moscow has joined them.
The European session accounts for 38% of the total trading volume, so no matter what period a trader joins trading, he will in any case work on a highly liquid market.
Opening of the Pacific session
Pacific trading starts at 10 pm Moscow time, when the Wellington Exchange begins its work. After 2 hours, Sydney “wakes up”.
Trading volumes at this time are quite small, so the price fluctuations will be small compared to other sessions even though the Pacific session overlaps with the Asian session when the Tokyo Stock Exchange opens at 2 am.
Due to the small time spread and small trading volume, some market experts refer the Pacific session to the Asian one, without separating it into a separate time range.
Which currency pairs trade best?
During Asian trading the greatest volatility is observed for assets that include the Japanese yen, in particular the euro / yen and its cross rates.
During European trading the popularity of the EUR/USD and USD/CHF currency pairs is growing.
Particularly strong activity is observed after the start of trading on the London Stock Exchange, when assets containing GBP are included in trading, in particular, this applies to GBP/USD.
American session is the most active, since all pairs that include USD are traded on it, and these are most of the major currency pairs. In addition, it should be borne in mind that Canadian and Brazilian real are especially popular at this time.
Pacific trades are characterized by the volatility of assets containing the Australian and New Zealand dollars.
Opening and closing of stock exchanges
The work schedule of the exchanges for MSC is as follows:
- Tokyo - from 2.00 to 11.00;
- Hong Kong, Singapore - 3.00-12.00;
- Frankfurt, Zurich, Paris - from 9.00 to 18.00;
- London - 10.00-19.00;
- Moscow - 10.00-19.00;
- St. Petersburg - 10.00-00.00;
- New York - 16.00-01.00;
- Chicago - 17.00-02.00;
- Wellington - 23.00-08.00;
- Sydney - 01.00-10.00.
Sessions indicator for MT4
How to apply the indicator in practice?
Typically, such an indicator will be useful for identifying volatile areas within the day, because. trading activity during the work of different exchanges differs markedly.
- It is believed that London and New York are the most volatile sessions, especially during their 4-hour “crossing”.
- The most calm, one might even say flat, is the Sydney session.
It is noteworthy that the activation of a trend or its change often coincides with the beginning of a particular trading session.
As a conclusion, it can be noted that the session indicator does not generate trading signals by itself, however, like other informational indicators, it may turn out to be an indispensable assistant in the trader's arsenal.