I've mentioned in the past that I don't trade the Asian session. This year though, I have opened GBP/JPY positions. No other pair I've observed has as much volume as the GBP/JPY during this session so if I like what I see, I won't hesitate to pull the trigger. But other than the GBP/JPY, most other pairs don't exhibit the volatility that a shorter term trader would prefer.
Asian session characteristics:
- quietest, least volatile of the three Forex trading sessions
- account for 15% of daily turnover
- typical 20-30 pip ranges for the EUR/USD
- spreads increase
- price action more due to Australian and New Zealand economic announcements than Japanese
The European trading session is a better time than ever to trade the volatility of the Forex market. I trade this session more than any other and find it suits me. I know most times at what price I'll enter a trade so a lot of my positions trigger automatically sometime between 2 am and 5 am EST. Many times, they'll also close automatically during this time range without me ever knowing because I'm asleep. This suits me because it prevents me from micromanaging positions which I sometimes have a habit of doing.
European session characteristics: - London is the heart and soul of FX and has over 200 market maker dealers
- 35% of daily trading volume
- whipsaw moves
- spreads decrease
- some observe the first price move during this session to be false as dealers run stops and explore support and resistance levels
I trade the US trading session but not as much as the European. I'm strictly a technical trader and since the US economic announcements move the Forex market like no other, I don't feel that comfortable. I used to trade more during this time but found that Forex brokers made it more difficult to properly manage a position (platform slowdown, increased spreads, wild swings.)
US session characteristics:
- account for 25% of daily turnover
- 10% of turnover from Greenwich, CT, the hedge fund capital of the world
- some observe that all price action that occurred during the Euro session is reversed
- the focus turns from European economic news to US economic news
Source for some of the information came from the article titled, "Secret Rhythms of FX Time Zones" at http://www.sfomag.com.
Explore these additional posts at Forex Project relating to Forex Time Zones:
- Is Trading The Asian Session a Waste Of Time?
- Most Volatile Pairs during Asian Session
