Forex trading sessions: when to trade, and when not to?
Good day to readers of our forex blog. This article is intended for beginner forex traders. We will talk about what are the forex trading sessions, about session schedule, what time most favorable for forex trading, and when to refrain from transactions. I will also share with you indicator for Metatrader 4, which automatically schedules the time of sessions on the chart.
When does forex work?
Forex currency market operates 24 hours a day, 5 days a week. Since different countries have different time zones, and large companies need to constantly change currencies, Forex, unlike the stock exchange, is open around the clock.
Trading Session Schedule
Technically, Forex trading starts on Sunday morning in Tel Aviv and continues until Friday afternoon in New York. However, the Tel Aviv session is so small that it is usually ignored, and real trading starts on Monday morning in Wellington (New Zealand).
However, Wellington is a small platform, and therefore the speed there is small. Bidding begins to really activate when Sydney and Tokyo wake up. but when a trading center opens in London, the site with the highest turnover, trading volumes simply skyrocket. When London leaves for lunch, New York, the second largest center for currency transactions, joins in the bidding process. The largest volumes of transactions take place at a time when London is day and morning is New York. Then London closes, and New York remains the main trading center until the end of the day. The most sluggish trading period is at the junction of the closure of New York (the American session) and the opening of Wellington.
Then Sydney opens, and the cycle repeats itself.
How to find out what time each of the trading sessions opens / closes?
We all live in different time zones. Russia (at the moment) does not translate the clock to winter / summer time, while Europe and America still translate. Therefore, confusion with the time of Forex trading sessions can easily arise.
In order to make it clear and understandable for the session schedule regarding your local time, I suggest using the Forex Market Hours service. Everything is intuitive there, you just need to set your time zone and the schedule of trading sessions will immediately be rebuilt in accordance with your time. Visual instruction is in the video tutorial at the beginning of the article.
What is the best time to trade?
The fact that the currency market works 24 hours a day does not mean at all that you need not to leave the monitor around the clock. There are active periods when you can make good money, and there are periods of calm when it is better not to open deals.
If you trade on daily charts, then trading sessions can be ignored. You simply open / close positions at the end of the current daily candle. The same with four-hour charts (H4).
But with intraday trading, on charts with a period of 1 hour or less, the most favorable period for opening deals is from the beginning of the European and the first 2-3 hours of the American session. At the end of this period, it is worthwhile to close existing transactions and forget about trading until the next day.
As promised at the beginning of the post, I share the indicator of trading sessions for the MT4 terminal. In general, there are a lot of similar indicators, we will consider the most popular one - I-sessions.
The indicator is set according to standard instructions, you only need to configure the opening / closing times of the sessions in accordance with the time of your broker in the trading terminal (hours in the "Market Watch" window).
After installing I-sessions on the chart, you will see a similar picture, as in the screenshot below. The indicator displays in different colors the period of each of the trading sessions, as well as the distance in points that the price per session has passed.