After finally knowing the basics of “What is Forex Trading?” The next basic detail that you need to learn is to identify when would be the time to trade. Although markets are said to be open for 24 hours 5 days a week, a forex trader should be an expert towards identifying market peak times. In order to do this, you initially need to familiarize yourself with the different trading sessions.
What is a trading session?
Technically a trading session is defined as a time that suits the normal trading hour in a definite location. Such a term refers to various times when forex markets are open for trading depending upon their location in the globe. In a local setting, a trading session is identified when the opening and closing bell rings.
What is the forex three session system?
The forex three session system refers to the peak trading sessions of the market in three various areas in the world namely Asian,European and North American. Some traders name these areas based on the city where the market is located ( Tokyo,London and New York).
1.The Asian Session
This is another term for the Tokyo forex session. Theoretically, it was called the Tokyo session because the majority of the capital markets are represented by Tokyo. This trading session however is not just applicable to Tokyo alone. The truth is everyone around the world can trade via Tokyo session provided that you can adjust to the Asian time if you are from another continent of hemisphere. In case you wish to know the market hours for this session, Tokyo market is open from midnight up to 6 PM GMT.
2. The European Forex Session
Also known as the London session, this market session is in charge of taking over the Asian market sessions just before the latter closes. In particular the market is open from 7 a.m. to 4 p.m. GMT. During these times you would most likely see the presence of other capital markets such as Germany and France.
3. North American Forex Session
The New York session or North American session is usually online while the European markets are in the middle of their session. During these times, the market is usually filled with traders coming from the US,Canada,Mexico and South American Countries. Despite the overlap in North American and European Sessions, not to mention the fact that Asian Markets have been closed for a long time by the time that North American session starts, it is still amazing to note that a high participation and volatility is observed during 12PM GMT up to 8PM GMT.
Conclusion:
As part of your discovery towards “What is Forex Trading?” Having an awareness of the availability of various markets from all around the globe will help you understand why forex experts say that markets are open 24 hours 5 days a week. This lesson along with your knowledge on trading strategies and planning will help you create a good move which will help you gain profit.
