If you are a day trader or aspiring to be one, then this article will open up your eyes regarding the different forex market sessions. We do know they are open 24 hours a day from Monday to Friday. But what is seldom discussed is the volatility during the different sessions which in turn affects the performance of the forex trading strategies you use. In this article i will discuss the 3 major sessions of the forex market and give you insight into each of them.
The 3 major sessions are Asian, London and New York.
Asian
The bulk of the move during this session usually derive from the Japanese & Australian markets. Majors like USD, EUR and GBP movement are basically limited within a 20-30 pip range. Thus i wouldn’t advise trading them during the Asian session.
However if one were to day trade this session, you would be looking at the JPY & AUD pairs as they offer the greatest volatility.
London
This is the golden hour! If you’re not trading London session, you have no business being a day trader. Volatility is expected to pick up during Frankfurt (which is an hour before London) and you can expect most pairs to create their daily highs and lows. Thus this is a good time to catch breakouts. About 2 hours after London open, volatility will ease a little as the Asian counterparts start to pack up and London traders start to have their lunch break.
During this period (2 hours after London open till New York open), price will usually trade within a range unless there are major news release. So if you would like to take a break, this would make perfect sense.
New York
This is also the golden hour! Simply because London and New York sessions are actively traded for the next 4 hours. During this period, you can expect a lot of volatility coming into the forex market as US will also be releasing their news. Also most pairs will try to reach for their average daily range if they have not done so.
During this session (New York open till London close) would be a good time to play a trend continuation move or reversal depending on the context of the market. Simply put, if price has not hit it's daily range, chances are it will attempt to do it in this session. If price has already hit it's daily range, chances are it will reverse back into mean.
With that i hope you guys now know which hours are the best time to trade and not simply trading because the forex market is open 24 hours. Lastly, it may not be your forex trading strategy that is failing but rather you are trading it at the wrong time!
Please feel free to leave your comments if you guys have any!
