Trading Sessions

Now that you know what forex is, why you should trade it, and who makes up the forex market, it's about time you learned when you can trade.

Yes, it is true that the forex market is open 24 hours a day, but that doesn't mean it's always active the whole day.

You can make money trading when the market moves up, and you can even make money when the market moves down.

BUT you will have a very difficult time trying to make money when the market doesn't move at all.

And believe us, there will be times when the market is as still as the victims of Medusa. This lesson will help determine when the best times of the day are to trade.




Market Hours


Before looking at the best times to trade, we must look at what a 24-hour day in the forex world looks like.

The forex market can be broken up into four major trading sessions: the Sydney session, the Tokyo session, the London session, and Pipcrawler's favorite time to trade, the New York session. Below are tables of the open and close times for each session:

Summer
Time Zone EDT GMT
Sydney Open
Sydney Close 6:00 PM
3:00 AM
10:00 PM
7:00 AM
Tokyo Open
Tokyo Close 7:00 PM
4:00 AM 11:00 PM
8:00 AM
London Open
London Close
3:00 AM
12:00 PM

7:00 AM
4:00 PM
New York Open
New York Close 8:00 AM
5:00 PM 12:00 PM
9:00 PM
Winter
Time Zone EST GMT
Sydney Open
Sydney Close 4:00 PM
1:00 AM
9:00 PM
6:00 AM
Tokyo Open
Tokyo Close 6:00 PM
3:00 AM 11:00 PM
8:00 AM
London Open
London Close
3:00 AM
12:00 PM

8:00 AM
5:00 PM
New York Open
New York Close 8:00 AM
5:00 PM 1:00 PM
10:00 PM
You can see that in between each session, there is a period of time where two sessions are open at the same time. From 3:00-4:00 am EDT, the Tokyo session and London session overlap, and from 8:00-12:00 am EDT, the London session and the New York session overlap.

Naturally, these are the busiest times during the trading day because there is more volume when two markets are open at the same time. This makes sense because during those times, all the market participants are wheelin' and dealin', which means that more money is transferring hands.

Now, you're probably looking at the Sydney open and thinking why it shifts two hours. You'd think that Sydney's open would only move one hour when the U.S. adjusts for standard time, but remember that when the U.S. shifts one hour back, Sydney actually moves forward by one hour (seasons are opposite in Australia). You should always remember this if you ever plan to trade during that time period.

Let's take a look at the average pip movement of the major currency pairs during each trading session.
Pair Tokyo London New York
EUR/USD 76 114 92
GBP/USD 92 127 99
USD/JPY 51 66 59
AUD/USD 77 83 81
NZD/USD 62 72 70
USD/CAD 57 96 96
USD/CHF 67 102 83
EUR/JPY 102 129 107
GBP/JPY 118 151 132
AUD/JPY 98 107 103
EUR/GBP 78 61 47
EUR/CHF 79 109 84

Japan Post Holdings

Image via Wikipediaapan Post Holdings Co., Ltd. (日本郵政株式会社 Nippon Yū-sei Kabushiki-gaisha?) is a large state-owned enterprise[2] in Japan that deals with mail delivery and financial services.[3] Its headquarters is located in Kasumigaseki, Chiyoda, Tokyo.[4] There were plans to fully privatise the agency but these have been put on hold.[3] The organisation was ranked #6 in the Fortune Global 500 of 2010.[3]

REFILE-GLOBAL MARKETS-Stocks sink in global sell-off, bonds soar

(Repeats to more subscribers)

* MSCI world stocks fall to fresh 2011 low

* Dow falls 300 points, S&P 500 down 2.7 pct

* Yen slides after Tokyo intervenes

* ECB in the market buying bonds - traders (Updates to afternoon)

By Edward Krudy and Rodrigo Campos

NEW YORK, Aug 4 (Reuters) - World stocks plunged to new lows for the year on Thursday with a sell-off in markets accelerating sharply as investors fretted about the outlook for the global economy and piled into safe-haven bonds.

European stocks tumbled to a level not seen since after the financial crisis in mid-2009, with Italy's equity market firmly in bear market territory, down nearly 30 percent since February, as investors fretted the euro-zone debt crisis was spreading.

Italy's blue-chip FTSE MIB index <.FTMIB> was suspended about 30 minutes before the close. The index tumbled slightly more than 5 percent.

With investors seemingly caught in a perfect storm, officials around the world moved to calm markets and ease volatility. The boldest step came from Tokyo, where the government spent an estimated 1 trillion yen ($13 billion) to stem the strength of its currency.

The intervention comes a day after an unexpected cut in interest rates by Switzerland to weaken the franc, which has spiked in recent days as investors search for safe havens. The currency edged slightly higher in New York trade on Thursday.

Even gold, which has raced to a series of new highs near $1,700 an ounce amid the gathering uncertainty, tumbled as deepening losses on Wall Street prompted investors to sell the metal and cover losses amid increasing margin calls outside of the commodity sector.

"When you get outside markets down significantly, some investors liquidate their winning positions in the gold and silver market longs to raise margins and support their losing trades," Phillip Streible, senior market strategist with Chicago-based futures broker MF Global.

The selling "is across market segments in terms of institutions, individuals, and traders," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey. "Everyone is leaning into it. It's a classic capitulation."

The exodus from stocks pushed the broad Standard & Poor's 500 Index <.SPX> down as much as 3.5 percent, while the clamor for safe-haven investments drove the yield of the 10-year U.S. Treasury note below 2.5 percent, the lowest since early November 2010.

The Dow Jones industrial average <.DJI> dropped 300.69 points, or 2.53 percent, to 11,595.75. The Standard & Poor's 500 Index <.SPX> fell 34.46 points, or 2.73 percent, to 1,225,88. The Nasdaq Composite Index <.IXIC> dropped 72.90 points, or 2.71 percent, to 2,620.17.

The MSCI world equity index <.MIWD00000PUS> was down 3.2 percent for the day, its largest daily fall in a year, and hit a fresh 2011 low.

European stocks <.FTEU3> lost 3.3 percent.

Safe-haven assets like the Swiss franc, the yen and gold have spiked this week as investors fret that governments around the world are planning spending cuts at a time of slowing global economic growth. Government moves are seen as just temporarily reversing the trend.

The latest spate of economic data points to slowing demand in the United States, while the euro zone grapples with the spread of its debt crisis to Spain and Italy, where borrowing costs have increased sharply.

The Dow Jones industrial average <.DJI> dropped 277.01 points, or 2.33 percent, to 11,619.43. The Standard & Poor's 500 Index <.SPX> fell 31.74 points, or 2.52 percent, to 1,228.60. The Nasdaq Composite Index <.IXIC> dropped 68.32 points, or 2.54 percent, to 2,624.75.

The MSCI world equity index <.MIWD00000PUS> was down 3.2 percent Fon the day, its largest daily fall in a year, and hit a fresh 2011 low.

European stocks <.FTEU3> lost 3.3 percent.

The benchmark 10-year U.S. Treasury note rose a little more than a full point to yield 2.50 percent, a level not seen since early November 2010.

The European Central Bank kept interest rates unchanged on Thursday, but traders said the central bank has been buying bonds of peripheral euro-zone countries in an effort to keep rates lower.

German Bunds gained, while Italian and Spanish government bond yields rose in volatile trade on Thursday, after a euro- zone monetary source said the European Central Bank was only planning to buy Portuguese and Irish bonds. For more see [ID:nR1E7IF024].

Markets were unconvinced the ECB bond buying will be effective in stopping contagion and some were disappointed that Italian and Spanish bonds, whose yields climbed above 6 percent recently, were not the target of the purchases.

"It wasn't a unanimous decision to (buy bonds). (ECB President Jean-Claude) Trichet looked really uncomfortable saying it," one trader said.

"The market, obviously, dismissed it pretty rapidly," another trader said.

Brent fell more than 3 percent and U.S. crude lost 4.8 percent, or $4.51 to $87.42 a barrel. Copper prices dropped 1.8 percent. (Additional reporting by Julie Haviv, Marius Zaharia and Emelia Sithole-Matarise; Editing by Jan Paschal)