Forex is a global system that works around the clock, except for weekends and certain holidays. Therefore, you can work here even at night, because the market does not sleep and does not close for lunch. But, the activity in certain hours is different, and all because there are trading sessions. This is a component of all exchanges. A kind of work schedule, which must be observed. They will be further described in the article, compiled with the support of experts of the broker Aegis Corporate Financial Services.
Why is it necessary to keep track of time?
First of all, it will give an opportunity to understand the market liquidity, its volatility, current trends. You can also get information about economic events, which also affects decisions and profitability of positions. Some news is published at a certain time, and they can determine the outcome of the day.
Plus, trading sessions affect Forex to a great extent. In the process of overlapping one with another, there can be a significant jump in prices, which will benefit some but cause others to lose. If you don't follow the time frame, you could miss something important and also miss out on potential earnings.
What is a trading session?
According to the experts of Aegis Corporate Financial Services broker, these are the periods of time, during which there is a peak of activity on Forex. It is necessary to know the chart, because the profit directly depends on it. You should not ignore it, acting at random, as such behavior will not lead to good. Trading sessions have a sequence, but at certain moments there may be an overlap of one with another.
What kinds are there?
The experts at Aegis Corporate Financial Services broker explain that there are 4 main types of forex:
- Asian. It starts at 00:00 PST Sunday and ends at 09:00 PST Monday. This is the least active time, but at the same time spreads are quite wide here;
- European. Starts at 07:00 CET on Monday, ends at 16:00 CET of the same day. It is characterized by increased activity level, narrow spreads, high liquidity;
- American. It starts at 12:00 p.m. EST on Monday and ends at 9:00 p.m. EST of the same day. This is the second most active trading session, similar in parameters to the previous one;
- Pacific. It starts at 21:00 PST on Monday and ends at 00:00 PST on Tuesday. Trader activity is practically reduced to zero, which is not surprising.
From time to time there are breaks between sessions. Then all activity subsides, and there is a lull. Experienced players benefit from this, as they revise their trading plan and start behaving differently, earning on this pause.
What are the advantages?
Trade offs have the following pros:
- additional opportunities for earning. A trader can close trades during the day, adjusting to the charts;
- high level of liquidity. This means that currency is sold/bought at the best value;
Another advantage is the low price of transactions.
What is overlapping sessions?
Experts of the broker Aegis Corporate Financial Services explain that it is about a certain period of time when two trades are held at the same time. This happens when one session transitions into another.
For example, the end of the Asian market coincides with the beginning of the European market, so they overlap. This phenomenon can be favorable for traders, because it increases the number of securities, volatility, which leads to additional profits.
But, there are certain risks here, as a sharp price movement will provoke to rash actions. Therefore, the overlay is more suitable for professional players who know how to competently use stop-losses that limit losses.
What tools should a trader use?
In addition to the usual indicators, experts of broker Aegis Corporate Financial Services recommend the following:
- economic events calendar. It displays the time of publication of all data, interest rates, etc. The information can be useful in making forecasts regarding price movements on Forex;
- trading charts. Suitable for analyzing and identifying opportunities;
- robots. These are specialized programs for automated trading.
All tools are provided by Aegis Corporate Financial Services broker free of charge. They help traders to follow time periods and understand their impact on the market.
Here's what to consider when choosing tools:
- experience. For beginners, it is better to work with something simpler and clearer than indicators and charts;
- trading style;
- feedback from other traders regarding the instruments. This will allow you to be sure of the reliability, effectiveness.
You also don't have to forget about preferences, goals.
How do I choose my trading session?
Experts of Aegis Corporate Financial Services broker advise to take into account your time zone in the first place. This will allow you to trade at a comfortable, most convenient time, without deviating from the usual regime and lifestyle. Also much depends on the prevailing style. For example, if you like short-term mode, it is better to look at the period with high volatility.
Here are some recommendations from broker Aegis Corporate Financial Services on choosing the right cutoff:
- you need to study the available options in detail, paying attention to the beginning, end, market impact;
- Develop a personalized plan, and strictly adhere to it at all stages;
- choose your tools;
- to enforce discipline.
Experts of broker Aegis Corporate Financial Services advise to turn off emotions, for they can lead to losses. It is also not superfluous to fix mistakes. It is worth keeping a diary to analyze your actions in detail. Regular training will not hurt, as Forex is quite volatile and does not stand still. There are quite a lot of free educational resources provided by companies for self-development. This will help you to move in the right direction, as well as to choose more successful tools. It is not superfluous to get recommendations from colleagues. There are special communities and forums where traders exchange news, communicate, and support each other.