Understanding FX Trading Sessions

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While the foreign exchange market is open 24 hours every day, there tend to be peak activities during specific periods of time. These peaks are often experienced during major trading sessions all over the world.

The sessions are divided into three major ones: the Asian, European, and the North American. You may also encounter them in their other names, which are the Tokyo (Asian), London (European), and New York (North American) sessions.


The typical trading day begins with the Asian session, starting at around 11pm GMT and ends with the North American session at around 8pm GMT. Over the course of the day, several sessions overlap, with the London session starting at the tail end of the Asian session, and the North American session beginning at around the middle of the European session.


Peaks in specific currencies usually happen when their respective countries are in session. The JPY and AUD, for example, experience active trading during the Asian session, while the EUR, GBP, and CHF during the European session, and the USD and CAD during the North American session. However, the activities become busier when two sessions overlap.


What These Sessions Mean to You


As a trader, you need to understand the importance of timing. Now the right timing depends on what kind of strategy you would like to employ. If you are a long-term trader, for example, it is important that you work during your currencies' off-peak hours as this would help you gain a better entry price. If, however, you are a short-term trader, you would be better off working within the sessions. This gives you the opportunity to buy and sell quickly, as well as make quick profits and avoid losing too much money when the currency's value drops.


So if you want to make the most out of your trades and maximise your profits, it would help to set a second clock to GMT, so you won't miss any important sessions throughout the day. Of course, it also helps to keep track of trading news as the information you receive will provide clues on how currencies will move in the next few hours, days, or weeks.


For more trading tips, be sure to check out our FX guides section.

By FX Strategy Team, Published on 18th of April 2013
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