One of the great aspects of the foreign exchange is that it is open 24 hours a day. Trading begins in the U.S. around 5PM on Sunday, and the markets don't close until Friday afternoon. Maybe you have time to trade during the day, perhaps you can only trade when you get back from the work in the evenings, or maybe you can't trade until after midnight – it just doesn't matter. In the forex, you can trade anytime you want to.
So how does this work? How can the forex be open 24 hours a day?
It is because the foreign exchange does not have a central location like the New York Stock Exchange. Instead, the currency markets are simply a network connection of banks throughout the entire world. So if you are trading at midnight in the U.S., your trade will be routed to whichever banks are on the network at the time. You just buy or sell, and your trade takes care of itself from there.
The 24-hour forex day is broken up into 3 sessions:
Tokyo session: 7PM – 4AM Eastern
London session: 3AM – 12 noon Eastern
New York session: 8AM – 5PM Eastern
Just to reiterate – it doesn't matter where you are at the time, you can still trade 24 hours a day. These sessions simply indicate which areas of the world are open for business at the time. In essence, the markets follow the sun. Banks are open in the forex just like they are in every-day life.
Now you will notice that certain sessions overlap. For example, the London and the New York sessions are both open from 8AM – noon Eastern. When sessions overlap, you have more volume. When you have more volume, the price moves more. When the price moves more, you have more potential for making money.
Most traders trade during the London and New York sessions. You can trade during the Tokyo session, but the markets don't move nearly as much. But I have seen some people trade the Tokyo session only and make some real good money. So it is really up to you and your trading schedule.
I enjoy trading the forex for many reasons, but one of the primary reasons is that I can trade whenever I want to. No matter what time of the day I want to trade, the forex is there waiting for me.
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