Elections, referendums, or similar events may cause market gaps, which can delay the trigger of StopLoss orders. In other words, the broker will close the trade when theres a market, at the first available price, not at the one specified initially.
The impact of an economic event like the Non-farm payroll (NFP) in the US can alter the markets usual behavior during the week. Lets take a look at the example below:
As the NFP reading took place during Feb 7 at 1:30 PM GMT (8:30 ET), you can see how the price spiked. The main reason for this volatility was the higher-than-expected NFP value of 225k. However, you can notice that after a couple of hours the price stabilized and continued its horizontal trend.
Finally, you can see that although the New York and Australian sessions dont overlap, they follow each other back-to-back, with a break during weekends.
The Tokyo and London Overlap: from 8:00 AM to 9:00 AM GMT
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As you could see from the information above, there are three main overlaps when you can see higher market activity, representing the best times for Forex traders:
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Market volume increases significantly as New York and London sessions, the two Worlds biggest finance centers, overlap. The American session starts when Europe is only half-way through. Also, please note that you are going to get an extremely fast-paced and volatile market.
You should assess the risk to take the following week. This will depend on your trading strategy and profile.
The Forex market is open 24-hours a day from Sunday 10:00 PM GMT to Friday 10:00 PM GMT, this includes most holidays worldwide. Please note that market liquidity is very low at the start of the trading week. Therefore, many traders consider the market to be open only for the 5 weekdays.
The Tokyo session follows shortly after. This session is also called the Asian session, because right after Tokyo large economic hubs like Singapore and Hong Kong start waking up. The Asian session starts around 12:00 AM GMT, when most of Europe is in a deep sleep. This is why you often hear European traders talking about waking up at 3 AM to trade the Asian session before going back to bed.
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So if you are trading the GBPJPY you can simply carry out a few powerful trades between 8:00 and 9:00 AM GMT, and then you are free for the day.
A trading week consists of the following major sessions:
Undoubtedly, London is the Economic Centre of Europe, and its just natural that the European session is also called the London session. Moreover, by the time the Brits wake up, other major economic hubs like Frankfurt, Luxembourg and Zurich have already started into their Forex Market Hours for the day.
As Forex traders, it is very important to know what is the availability of the market. Moreover, it is important to understand how do the different trading hours or sessions impact your trading strategy.
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