Despite the fact that the Forex market operates around the clock, there are certain time periods in which it is more or less active in respect of transactions with various currencies. This is due to operation time of the main financial markets in the world.
We all know of the existence of time zones, because in this respect, Russia is a unique country - its territory is once in 10 time zones. This means that at the same time in different cities around the world different local time, day and location in one of the planet may mean a different night. For convenience, the orientation of the time introduced the concept of Greenwich Mean Time, or world time, which is indicated GMT (Greenwich Meridian Time). GMT - this is the local time in the vicinity of Greenwich (zero) meridian. In the neighborhood of the European countries include the United Kingdom and Portugal.
As a forex trader you can be anywhere in the world, but it is important to know exactly what time zone you are in and how your local time is related to the work of the local time of the main financial centers of the world. The figure shows a map of the world, where each color determines the time zone.
From west to east (left to right on the map) DST changes as follows with respect to GMT:
-12
|
-eleven
|
-10
|
-9
|
-8
|
-7
|
-6
|
-5
|
-4
|
-3
|
-2
|
-1
|
0
|
1
|
2
|
3
|
4
|
5
|
6
|
7
|
8
|
9
|
10
|
11
|
12
|
It is worth noting that in some countries practiced DST (daylight saving time), so at different times of the year such countries will be in two adjacent time zones. The figure also displays the time zones corresponding to the winter time.
All activity on the Forex market conditionally divided into 4 sales Each session is active in the working hours of the region.
The first begins Pacific session when its work begin financial markets in Wellington (New Zealand) and Sydney (Australia). Almost immediately after it started the Asian session, when waking up Tokyo (Japan), Hong Kong (Hong Kong) and Singapore (Singapore). The most active trading during these sessions take place with the participation of the British pound sterling: GBP / JPY, GBP / CHF. In addition, the pairs are trading with the US dollar as the USD / JPY, AUD / USD and NZD / USD, since the opening of the Asian session, followed by closing the US session the previous day. Euro practically no trading before the opening of the European session in London.
By the close of the Pacific and the Asian session started the European session.Wake up the largest financial centers in Europe, London (UK), Frankfurt (Germany), Zurich (Switzerland). London - the largest financial center of the world, where there is 30% of all trading on the international currency market. During the European session the pair traded actively with the British pound sterling (GBP) and Euro (EUR).Japanese Yen (JPY), on the contrary, is losing its appeal during the trading day. In addition, the pair traded in USD: USD / CHF, USD / CAD, EUR / USD.
By the middle of the European session begins the work the American session with the opening of the largest financial centers in New York (USA), where there is 15% of the global volume of trading on the Forex. Most transactions take place during the simultaneous activity of the European and American sessions, when liquidity such as the pair USD / CHF, GBP / USD, USD / CAD and EUR / USD is great. By the middle of the US session, when waking up in Los Angeles, the European session finishes its work, so market liquidity of trading in European cross rates (EUR / GBP and EUR / CHF) falls. Experienced traders almost do not trade these pairs during the American session.
Depending on the season, summer or winter time in various financial centers of the world will be different from the world in the GMT time the number of hours in the following table.
Finance center
|
The difference in hours from the GMT time
| |
In the winter
|
In summer
| |
Wellington
|
11
|
12
|
Sydney
|
9
|
10
|
Tokyo
|
9
|
9
|
Hong Kong
|
8
|
8
|
Singapore
|
7
|
8
|
Moscow
|
3
|
4
|
Frankfurt am Main
|
1
|
2
|
Zurich
|
1
|
2
|
London
|
0
|
1
|
New York
|
-5
|
-4
|
Los Angeles
|
-8
|
-7
|
The table shows that not all countries have a daylight saving time as in summer and winter are in the same time zone.
When working at Forex , in addition to the activity of the main financial centers of the world during the relevant trading sessions, it should also take into account the fact that on Saturday, Sunday and public holidays closed financial centers. Active work on the world currency market these days is minimal, and therefore liquidity is low. The market as it freezes in anticipation. Even the market's reaction to significant events in the world is postponed until Monday (the next working day). Therefore, experienced traders tend to close all open positions on Friday (the opening and closing positions will be described later), in order to avoid unexpected movements in exchange rates caused by the events that occurred in the world over the weekend.
On Monday, Forex is usually idle and active trading is not conducted on it. Participants are only trying to identify the dominant trends in the rates.Tuesday also begin active trading, which continues until the end of Friday's US session.
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