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Forex market trading

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Before you can trade in the foreign currency exchange market, you need to understand how the market opens, what the various sessions are, and how they affect market liquidity and trades.

The forex market is open and active 24 hours a day. It starts on Monday mornings in the Asia-Pacific time zone, and goes until Friday close of business hours in New York. It is open 6 days a week, and there is almost always a place in the world where the forex market is going and trading.

At any given time, several different global financial center area open and activity involved in currency trading. There really is no day off, which sets the forex market apart from other market. Currency trading even happens on the holidays. It might be a holiday in one country, but not necessarily in another, which means that financial centers will still be trading currencies. The only time it may close for a holiday is on New Year's Day.

The opening of the trading week- There is no official starting time to the trading day or week. The market tends to kick off when Wellington, New Zealand opens on Monday morning. It is the first financial center west of the international dateline.This is when the currency market resumes trading after the weekend, and for the forex market to react to the events and news from the weekend. It closes when the New York business day is over on Friday.

There are three major sessions for forex market trading, the Asia Pacific, European/London, and the North American session:

Asia-Pacific:The trading volumes in the Asia-Pacific account for 21% of the total global volume. Because of the size of the Japanese market and the importance of it, most of the action during the Asia-Pacific session is focused on the Japanese Yen pairs. In other words, the yen with the US dollar, or the yen and the Euro, etc. The price movements during this session often indicate what the Japanese market is doing.

European/London: The trading volume in the European/ London session accounts for over 50% of the total daily global trading volume. This session overlaps with the Asian session and the North American session. This is the session where market interest and liquidity are at its peak.Most of the biggest moves take place during this session.
North America: This session has significant volumes because of the overlap with the European trading session, and makes up 22% of the global daily training session. The most meaningful directional price movements take place during this overlap.

Market liquidity and interest fall off significantly in the New York afternoon. This can make challenging trading conditions. This leads to stagnating price actions. It can also lead to outsized price movements, fewer traders scramble to get similarly fewer prices and liquidity. Traders need to be aware of lower liquidity conditions, and adapt accordingly.


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