The foreign exchange market, or forex market, is a global decentralized market where currencies are traded. It is the largest and most liquid financial market in the world, with an average daily trading volume of $5.3 trillion. The forex market is open 24 hours a day, five days a week, and operates in four major trading sessions: the Sydney session, the Tokyo session, the London session, and the New York session.
1. Sydney Session
The Sydney session starts at 10 PM GMT and ends at 7 AM GMT. The Sydney session is the first trading session of the day and is considered the least volatile of the four sessions. The major currency pairs traded during this session are the AUD/USD, NZD/USD, and USD/JPY. The Sydney session overlaps with the Tokyo session, which creates higher liquidity and volatility during this time.
2. Tokyo Session
The Tokyo session starts at 12 AM GMT and ends at 9 AM GMT. The Tokyo session is the second trading session of the day and is considered the most volatile of the four sessions. The major currency pairs traded during this session are the USD/JPY, EUR/JPY, and AUD/JPY. The Tokyo session overlaps with the Sydney session and the London session, which creates higher liquidity and volatility during this time.
3. London Session
The London session starts at 8 AM GMT and ends at 5 PM GMT. The London session is the third trading session of the day and is considered the most important of the four sessions. The major currency pairs traded during this session are the EUR/USD, GBP/USD, and USD/JPY. The London session overlaps with the Tokyo session and the New York session, which creates higher liquidity and volatility during this time.
4. New York Session
The New York session starts at 1 PM GMT and ends at 10 PM GMT. The New York session is the fourth and final trading session of the day and is considered the second most important of the four sessions. The major currency pairs traded during this session are the EUR/USD, GBP/USD, and USD/JPY. The New York session overlaps with the London session, which creates higher liquidity and volatility during this time.
The forex market is open 24 hours a day, five days a week, and operates in four major trading sessions. The Sydney session, the Tokyo session, the London session, and the New York session. Each trading session has its own unique characteristics and trading opportunities. Understanding the different trading sessions and the major currency pairs traded during each session is essential for any forex trader.
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