Trading Session Time

A trading session refers to a specific period when a particular financial market is open for trading. In forex, the market operates 24 hours a day, but it is divided into different sessions based on the major financial centers around the world—Sydney, Tokyo, London, and New York.

The Asian session has the lowest volume of the three trading sessions. But this doesn’t mean that we cannot find any opportunities there. Besides traders that live in Asia, this trading session can also attract European traders who like to trade during the night or Americans that just got home from work and want to spend late afternoon trading. The Asian session is mostly controlled by the Japanese economy, the third biggest globally. The Japanese yen is the third most traded currency, with around 20% of all transactions. During the Asian session, around 20% of the daily volume is traded. Besides Japan, we have countries such as Singapore, New Zealand and Australia which participate in the market. Because of that, currency pairs such as AUDJPY, AUDNZD or NZDJPY are the best ones to trade. Macroeconomic releases from New Zealand, Australia and Japan also cause high volatility, which every trader should pay attention to.

London was always one of the most important business centres globally due to its strategic place between Europe and America. Nowadays, London is one of the leading financial hubs in the world. That’s why the European session is called the London session because the city accounts for the majority of total business volume. The European session makes up over 30% of traded volume alone at the Forex market. One of the key reasons to trade during the European session is that we can trade both European and American macroeconomics releases, which bring significant volatility to the markets. Thanks to high liquidity, traders can benefit from very low spreads optimal for scalpers and day traders. Since the European session is the first high liquid session of the day, many new trends are forming during the London open. Markets usually move right after the open and slow down during the London lunch hours as large participants take small breaks before New York kicks in. During the European session, not only are major currencies moving, but we often see high volatility in minors as well. The currency pair EURGBP, and GBPJPY are extremely popular crosses that offer high volatility and plenty of trading opportunities.

The North American session is the last trading session for the given day. North American session is sometimes called New York because of the city’s importance as the world’s financial hub. Because over 80% of the traded volume involves the US dollar, there is no wonder that the North American session brings a significant amount of volatility every day. Also, most of the key fundamental events happen during the North American session. Namely, these can be the non-farm payrolls – NFP, Federal Open Market Committee – FOMC, unemployment rates or consumer price index – CPI. North American session slows down around London close at 4 PM, but we can find opportunities in the market even after that. Although money usually flows to the US index market once the European session is finished, such as S&P500, Dow Jones or Nasdaq. Same as the European session, the North American session offers tight spreads and the right conditions for intraday trading.

Now that we’ve covered the main trading sessions, let’s take a closer look at how different days of the week impact market activity.