HOW TO TRADE DIFFERENT TIME-ZONE NEWS.

Created; Aug 22, 2022

Introduction

Been a trader for several years has taught me a lot of many things and new concepts that I learn on daily basis. Trading has never been a easy journey or ride. It takes time to grasp all the concepts but always learn a new thing every day and put in practice the new concepts. Today am going to share with you one of the greatest and simple first learn concept that starts all way when you start the journey to become a trader.

Since most traders can't watch the market 24/7, there will be times of missed opportunities, or worse—when a jump in volatility leads to a movement against an established position when the trader isn't around. For this reason, a trader needs to be aware of times of market volatility and decide when it is best to minimize this risk based on their trading style.

KEY TAKEAWAYS

The 24-hour forex trading session can be broken down into three manageable trading periods.
Traders often focus on one of the three trading periods, rather than attempt to trade the markets 24 hours per day.
Peak activity periods are the Asian, European, and North American sessions, which are also called Tokyo, London, and New York.
Sometimes sessions will overlap, such as a four-hour period for peak activity in both Europe and North America.
Volatility is sometimes elevated when forex trading sessions overlap.

THE 3 TIME-ZONE SESSIONS

Asia Time-Zone

When liquidity is restored to the forex (or FX) market at the start of the week, the Asian markets are naturally the first to see action. Unofficially, activity from this part of the world is represented by the Tokyo capital markets and spans from midnight to 6 a.m. Greenwich Mean Time (GMT). There are many other notable countries that are present during this period, however, including China, Australia, New Zealand, and Russia. Considering how scattered these markets are, it makes sense that the beginning and end of the Asian session are stretched beyond the standard Tokyo hours. Asian hours are often considered to run between 11 p.m. and 8 a.m. GMT.

London Time-Zone

The European session takes over in keeping the currency market active just before the Asian trading hours come to a close. This FX time zone is very dense and includes a number of major financial markets. London has taken the honors in defining the parameters for the European session to date. This trading period is also expanded due to other capital markets' presence (including Germany and France) before the official open in the U.K., while the end of the session is pushed back as volatility holds until after the close. Therefore, European hours typically run from 7 a.m. to 4 p.m. GMT.

New York Time-Zone

The Asian markets have already been closed for a number of hours by the time the North American session comes online, but the day is only halfway through for European traders. The Western session is dominated by activity in the U.S., with contributions from Canada, Mexico, and countries in South America. As such, it comes as little surprise that activity in New York City marks the high volatility and participation for the session.

My Favourite Forex Pair

This list consists my favorite list of pair that I trade in and the most profitable time Time-Zone, don't forget to check your Time-Zone watches in regard to to the GMT and location. As the different timezones NEWS affect the pairs currency in each Time-Zone.

Gold/Spot - XAUUSD

TIME-ZONE SCHEDULES

When it is Noon GMT on Friday, the time is 8:00 a.m. ET on Friday in New York. Taking into account the early activity in financial futures, commodity trading, and the concentration of economic releases, the North American hours unofficially begin at 12 p.m. GMT. With a considerable gap between the close of the U.S. markets and the open of Asian trading, a lull in liquidity sets the close of New York trading at 8 p.m. GMT as the North American session closes. The Asian/European sessions overlap, sometimes creating more volatility, due to increased trading activity during those hours.

If the currency pair is a cross made of currencies that are most actively traded during Asian and European hours (like EUR/JPY and GBP/JPY), there will be a greater response to the Asian/European session overlaps and a less dramatic increase in price action during the European/U.S. sessions' concurrence. Of course, the presence of scheduled event risk for each currency will still have a substantial influence on activity, regardless of the pair or its components' respective sessions.

The Best Hours for Forex Trading

Currency trading is unique because of its hours of operation. The week begins at 5 p.m. EST on Sunday and runs until 5 p.m. on Friday. Not all hours of the day are equally good for trading. The best time to trade is when the market is most active. When more than one of the four markets are open simultaneously, there will be a heightened trading atmosphere, which means there will be more significant fluctuation in currency pairs. When only one market is open, currency pairs tend to get locked in a tight pip spread of roughly 30 pips of movement. Two markets opening at once can easily see movement north of 70 pips, particularly when big news is released.

Overlaps in Forex Trading Times

The best time to trade is during overlaps in trading times between open markets. Overlaps equal higher price ranges, resulting in greater opportunities. Here is a closer look at the three overlaps that happen each day:

U.S./London (8 a.m. to noon): The heaviest overlap within the markets occurs in the U.S./London markets. More than 70% of all trades happen when these markets overlap because the U.S. dollar and the euro (EUR) are the two most popular currencies to trade, according to Lien. This is the most optimal time to trade since volatility (or price activity) is high.

Sydney/Tokyo (2 a.m. to 4 a.m.): This time period is not as volatile as the U.S./London overlap, but it still offers a chance to trade in a period of higher pip fluctuation. EUR/JPY is the ideal currency pair to aim for, as these are the two main currencies influenced.

London/Tokyo (3 a.m. to 4 a.m.): This overlap sees the least amount of action of the three because of the time (most U.S.-based traders won't be awake at this time), and the one-hour overlap gives little opportunity to watch large pip changes occur.