Once you understand when markets are open and what each session might have to offer, you can further your forex training on when to trade. Several articles have examined various points about the market sessions and the time zones they have fallen into. Now it is time to consider the ultimate answer to the question of when should you trade? Let’s consider TV for a minute. When do you usually watch TV or when does most of the world? It is typically in the evenings in what is called prime time. The news is just about over and all these entertainment shows start appearing, right? They are designed to capture the person at home that is not ready for bed, but done with dinner and is looking for relaxation. Logically, you want to find the prime hours of the forex market.
Forex Training for the Overlap Sessions
Tokyo and London have a small overlap. The Asian session is about to wrap up for the day, with London on its beginning. During this overlap you can pretty much figure the market is running towards a stand still. Asian traders are looking beyond the trading day, while European traders are waiting for the New York market to open in a few hours. Liquidity is certainly missing.
Forex training point: liquidity is the vocabulary term given to the asset or security in the trading market that can be sold or bought based on price. It is basically an asset you will want to invest in or sell in order to gain money from it. In this case we are talking currency pairs that you buy and sell to gain profit from.
It stands to reason as you learn about forex training that you would want to trade when there is going to be liquidity in the market. As soon as the Asian market is completely closed then the liquidity certainly dies off a little more than the afternoon Tokyo snooze fest already provided.
London-New York Forex Training Session
Once Asia is closed there is still activity happening in much of Europe’s market; however, there is also the meal time coming and the anticipation of New York’s open with its plethora of fundamental data. Check further on fundamental data in forex training to learn why it applies to liquidity and when to trade.
When New York opens there is some reflection to see what happened in the rest of the world. Yet, there are also those anticipating the economic news that is about to be released and are ready to trade so they are starting to get positions ready. Finally, New York releases whatever news it has for the financial day and boom – now you see big volume, volatility, and liquidity in the market for numerous currency pairs including USD and CAD.
Any late data rolling out in Europe starts to affect the market too. For four hours the financial world is alive and it is time for forex training to kick in for those who are ready to trade real money. Europe closes and the USA session sees a decline in trades, thus the UK-USA overlap is when to trade for anyone.
Get a free Forex PDF PLUS:
- 14 Video Lessons
- Free One-on-One Training
- A 5000$ Training Account
- In-House Daily Analysis
- Get FULL ACCESS