Basic Forex Education_2. When to Trade Forex

Lesson 2: When to Trade Forex Although it's true that the Forex market is open round the clock, it doesn't mean that you should be trading every single minute of the day. Trading in Forex Forex trading can be classified into three main trading sessions. The first of them is the Asian trading session - from 12 a.m. to 8 a.m. Usually, in this session, exchange rates tend to range a lot, having short term fluctuations resulting in breakouts later in the day. Here, you will notice pair-wise trading such Dollar/Yen, Euro/Yen. At 7 a.m. the European session starts. Because about 30% of all Forex transactions come from London, you can see a lot of movement in most of the currency pairs. Volatility then quietens down in the middle of this session - at around 12 p.m. when Traders are taking a break and waiting for the New York session to start. Just when the European Traders are getting back from their lunch, US traders start coming into their offices. As the first half of the US session overlaps with the European session, you will notice that the market has the most liquidity at this time. At around 5 p.m. you can often see rates start to race as the London Traders close their positions to avoid any overnight surprises. Then, after 5 p.m., the Market quietens down again until the Asian section opens.