Forex trading is an altogether a totally different beast as compared to stock trading. One of the major differences between the forex and stock markets is that forex markets are open 24 hour, 5 days a week while stock markets have fixed timings. For example New York Stock Exchange (NYSE) is open from 9:00 AM to 4:00 Pm. You can only trade stocks at NYSE during this time.
This continuous 24 hour trading at the forex markets is something quite novel for many new traders. Forex is traded Over the Counter (OTC) meaning there is no Central Exchange. Forex market is a global market. When one center is opening, another center is closing. This is very important for a new forex trader to understand.
Now, how to provide a open and close session for each day so that you dont have to sit in front of your computer all day getting yourself exhausted. An ingenious way is to divide the day into three eight hour session.
Divide each session into two by using 4 hour charts. Since only three major money centers are responsible for most of the turnover in the forex markets, this will help you to see each regions risk appetite and make your trading day more manageable.
The three major money centers that affect the forex markets everyday are namely: Asia, London and New York. We will call our three trading sessions, the Asian, the London and the New York Session.
Asian FX Market Session: Sydney, Tokyo, Hong Kong and Singapore are the main centers that constitute the Asian Session. Export corporations and Central Banks of these countries are trying to hedge their currency fluctuations. Due to this price action is jumpy, fades away and is not sustainable.
London FX Market Session: London FX Market is by far the most well developed and highly liquid market in the world. Due to the depth of the London market, the price action that takes place during this time forms the major moves that are going to continue for the rest of the day. These price moves tell you about market sentiments and the trend.
New York Market Session: New York is second to London. Both New York and London overlap in the morning when New York is opening and London is closing. This is the best time of the day for savvy traders to trade as there is a lot of price action during this time.
The following timings give important breakdown of the 24 hour forex markets: 00:00 GMT-Sydney is opening. 11:00 GMT-Sydney and Tokyo have closed while London opens. 15:00 GMT- London becomes active with lot of turnover. 17:00 GMT- London is still active and New York is opening. 18:00 GMT- London has closed. 19:00 GMT- New York is about to close!
The overlap between London and New York is when major price moves take place. London is in fact the trend setter in forex as well as fashion. - 16890
This continuous 24 hour trading at the forex markets is something quite novel for many new traders. Forex is traded Over the Counter (OTC) meaning there is no Central Exchange. Forex market is a global market. When one center is opening, another center is closing. This is very important for a new forex trader to understand.
Now, how to provide a open and close session for each day so that you dont have to sit in front of your computer all day getting yourself exhausted. An ingenious way is to divide the day into three eight hour session.
Divide each session into two by using 4 hour charts. Since only three major money centers are responsible for most of the turnover in the forex markets, this will help you to see each regions risk appetite and make your trading day more manageable.
The three major money centers that affect the forex markets everyday are namely: Asia, London and New York. We will call our three trading sessions, the Asian, the London and the New York Session.
Asian FX Market Session: Sydney, Tokyo, Hong Kong and Singapore are the main centers that constitute the Asian Session. Export corporations and Central Banks of these countries are trying to hedge their currency fluctuations. Due to this price action is jumpy, fades away and is not sustainable.
London FX Market Session: London FX Market is by far the most well developed and highly liquid market in the world. Due to the depth of the London market, the price action that takes place during this time forms the major moves that are going to continue for the rest of the day. These price moves tell you about market sentiments and the trend.
New York Market Session: New York is second to London. Both New York and London overlap in the morning when New York is opening and London is closing. This is the best time of the day for savvy traders to trade as there is a lot of price action during this time.
The following timings give important breakdown of the 24 hour forex markets: 00:00 GMT-Sydney is opening. 11:00 GMT-Sydney and Tokyo have closed while London opens. 15:00 GMT- London becomes active with lot of turnover. 17:00 GMT- London is still active and New York is opening. 18:00 GMT- London has closed. 19:00 GMT- New York is about to close!
The overlap between London and New York is when major price moves take place. London is in fact the trend setter in forex as well as fashion. - 16890
About the Author:
Mr. Ahmad Hassam is a Harvard University Graduate. His passion is Investing, Stocks and Forex Trading. Discover a revolutionary new Forex Robot.
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