Introduction
In the Forex market, three major trading sessions align with key financial hubs worldwide. These sessions are based on the opening and closing times of major financial markets and play a significant role in determining market liquidity, volatility, and trading activity. The three sessions are:
1. Tokyo Session
The Tokyo session starts from 11:00 PM to 8:00 AM. The major markets on Tokyo session in Tokyo, Hong Kong, Singapore, Sydney,
Generally, it is easily with lower volatility compared to the other session. The best trading currency pairs involve the Japanese Yen (JYP), such as USD/JPY. It sets the tone for the following sessions, often leading to trends that continue later in the day.
2. London Session
The London session runs from 7:00 AM to 4:00 PM. The major markets in the London session are London, Frankfurt, and Zurich. It is the most active session with high liquidity and volatility. It overlaps with the Asian session in the early morning and with the U.S. session later. Major currency pairs like EUR/USD, GBP/USD, and EUR/GBP are heavily traded. News and economic reports from Europe can significantly influence the market during this time.
3. New York Session
The New York session starts from 12:00 PM to 9:00 PM. The major markets for the New York session are New York and Toronto. High volatility, particularly in the first few hours when it overlaps with the European session. – The U.S. Dollar (USD) is heavily traded, focusing on pairs like EUR/USD, USD/JPY, and GBP/USD. The – Economic news from the U.S. and Canada has a significant impact, influencing global trends
Conclusion
The overlap between sessions, especially the London-New York overlap (12:00 PM – 4:00 PM GMT), is the most active and liquid time in the Forex market, offering the best trading opportunities.
Understanding the dynamics of each session helps traders decide when to trade, depending on the currency pairs they are interested in and the market conditions they prefer.