The forex market is open 24 hours a day, but not always exciting. Sometimes the market can move very quickly, but sometimes to “move” a little bit is a problem. You have to know the international trading sessions to trade. The best time to trade forex market or forex trading hours is best when the market is at the most active level when the price difference in the transaction (the difference between the bid and ask price) tends to narrow. In these situations, market makers will make less money, and investors will get more money due to cost savings.
To understand, we need to understand the market transaction time as follows:
The four main sessions of the market, Sydney, Tokyo, London and New York, respectively opened and closed as follows:
Notes on forex trading sessions
When trading in the Forex market, investors should be aware of the opening and closing time of sessions in Forex.
Trading sessions in the Forex market vary from season to season because it is common in some temperate and tropical countries such as the United States to adjust their time zone in the summer to save energy and not upset the circadian rhythm.
People everywhere want their work time to start at 8 o’clock (local time). London and New York are the places to adjust their time zone so their clock is 1 hour faster in the summer. Sydney too, because they are located in the Southern Hemisphere so their clock adjusts slower than 1 hour. And Tokyo does not apply the time zone adjustment, so the trading time frame is unchanged throughout the year.
Therefore, if you live where the US and US Session time zone changes have fixed trading hours, the Australian and Asian sessions will open earlier in the Winter-Spring season and later in the Summer-Fall season.
Conversely, if you live in a country where there is no time zone adjustment, you will find that the Asian session has a fixed trading time frame, the Australian session opens earlier in the winter-spring, later in the summer-autumn, while the remaining two sessions open earlier in summer-autumn and later in winter-spring.
Each session is 9 hours, which is the number of working hours of financial centers in the respective time zones.
For new players often think the Forex market is open 24 hours a day, so you can enter your order at any time. Due to the difference in geography, demographics, regional situation … so the Forex market fluctuates differently depending on each session of the day. And the more volatile the session, the more opportunities there will be for the market to trade.
The markets follow each other
In all financial markets, not just forex markets, a forex session tends to pick up signals from previous trading.
If the US market goes up or shows risky taste, Asia will open the same path and continue to do so until any news or sentiment promotes the US market.
If Asia closes up or down sharply, expect Europe, focusing on London, to open the same.
If Europe shakes even higher as the US session unfolds, expect the United States to open its doors to support risky assets and risky currencies.
Similarly, if one session reverses previous sessions, it is very likely that the next forex session will open in the same direction.
The effects of each session
Asia tends to fall behind in New York trading as Asia closes when US news appears, so major US news provides hints about how Asia will open. The European session reacted to early US news but missed the news later, and the opening will be affected by what happens in Asia.
For example, if great news comes from the United States, but then there is bad news in Asia, then the opening of Europe will reflect how traders respond to a combination of news from both sessions. Similarly, opening up in the US tends to take into account the news of both Asia and Europe.
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In a nutshell, short-term moves heavily affected by the nearest bottom session that ended the forex trading day, news and whether that news justifies a move up or beyond the next technical area. or not. As mentioned earlier, short-term cash flows from large companies (from large investors or simply traders of conventional multinational companies) can also initiate price dynamics.