One of the best features of the forex market is that it is open 24 hours a day. This is because trading in the forex market encompasses the exchange of all currencies all over the globe, which means that the market is functioning whenever a financial market is open anywhere in the world.
The forex market opens when the opening bell of the Sydney trading session rings on a Monday and it closes as the closing bell of the New York session tolls on Friday. Throughout the entire week, forex traders are able to execute their trades practically any time since is a transition from one trading session to the next.
For a trading day, there are three main trading sessions, namely the Asian, European, and U.S. sessions.
Australian and Asian markets are included in the Asian trading session. These are the Sydney financial markets and Tokyo banking hours. During the Asian session, currencies in Asia and Oceania are most highly-traded. Currency pairs that enjoy higher liquidity are AUD/USD, NZD/USD, USD/JPY and other yen pairs. Australia, New Zealand, and Japan also usually release their economic data around this time.
The European session comprises the London exchange and the banking hours of European markets. Around this time, it is the European pairs that are most actively traded and therefore enjoy more price action. These are EUR/USD, GBP/USD and USD/CHF. Yen crosses of European currencies, namely EUR/JPY and GBP/JPY, are also active during the European session. During this forex trading session, the euro zone, United Kingdom, and Switzerland often release their economic data.
Last but not least is the U.S. trading session, which includes American banking hours and Canadian market times. Dollar pairs are highly liquid during this time, as the U.S. and Canada typically report their economic data during the U.S. session. USD/CAD, GBP/USD, USD/CHF, USD/JPY are among the actively traded pairs in this session.
The trading session overlaps between these market hours allows the forex market to operate seamlessly and continuously through the week. When one market is about to close, another one is getting ready to open. During these hours, both sets of traders from the opening and closing sessions are actively trading, which means that there is a higher amount of liquidity in overlaps.
In this case, there is a good potential to make profits off reversals or quick bounces from support and resistance levels. This is because there are targets or stops located around those areas and traders who scalp might just decide to book their profits or losses for the day.
The forex market opens when the opening bell of the Sydney trading session rings on a Monday and it closes as the closing bell of the New York session tolls on Friday. Throughout the entire week, forex traders are able to execute their trades practically any time since is a transition from one trading session to the next.
For a trading day, there are three main trading sessions, namely the Asian, European, and U.S. sessions.
Australian and Asian markets are included in the Asian trading session. These are the Sydney financial markets and Tokyo banking hours. During the Asian session, currencies in Asia and Oceania are most highly-traded. Currency pairs that enjoy higher liquidity are AUD/USD, NZD/USD, USD/JPY and other yen pairs. Australia, New Zealand, and Japan also usually release their economic data around this time.
The European session comprises the London exchange and the banking hours of European markets. Around this time, it is the European pairs that are most actively traded and therefore enjoy more price action. These are EUR/USD, GBP/USD and USD/CHF. Yen crosses of European currencies, namely EUR/JPY and GBP/JPY, are also active during the European session. During this forex trading session, the euro zone, United Kingdom, and Switzerland often release their economic data.
Last but not least is the U.S. trading session, which includes American banking hours and Canadian market times. Dollar pairs are highly liquid during this time, as the U.S. and Canada typically report their economic data during the U.S. session. USD/CAD, GBP/USD, USD/CHF, USD/JPY are among the actively traded pairs in this session.
The trading session overlaps between these market hours allows the forex market to operate seamlessly and continuously through the week. When one market is about to close, another one is getting ready to open. During these hours, both sets of traders from the opening and closing sessions are actively trading, which means that there is a higher amount of liquidity in overlaps.
In this case, there is a good potential to make profits off reversals or quick bounces from support and resistance levels. This is because there are targets or stops located around those areas and traders who scalp might just decide to book their profits or losses for the day.
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If you can't decide which forex trading session you should participate in,you should take a look at which currencies are active during these times Check out this great post>.