Characteristics of the 3 Major Market Sessions: Asia, Europe & America Market Sessions

Asia Market Session

During the Asia session only 8 % of total daily financial transactions go through the Tokyo desks. This is the least active of the three major sessions. Most of this 8% only involves yen based forex currency pairs with very little trade transactions happening for other financial instruments like GOLD. This is the reason why it is not suitable to trade Gold metal during this period. Not trading this period will save you a lot of time and money.

European Session

The London/European session takes the majority share of overall total financial transactions, 34 % of all financial transactions are carried out during this European market session. London time zone is also well placed in terms of business hours for both eastern & western economies, this is when there are market session overlaps & this results in high number of financial transactions during the period. This time is most liquid & most volatile session for all the forex currency pairs and also Gold metal.

Europe time-zone also includes the euro zone member countries. The Euro zone has 17 members & major banks of these countries are open and there is a lot of liquidity as many financial transactions are being executed.

America Session

The USA market session takes up 20 % of all financial trading transactions. The most active time for trading is approximately from 8 am to 12 pm GMT when both London and New York dealing desks are open. This is when there is in general the highest volatility as it is also when the majority of the major US economic announcements are released.

European and USA Market Sessions Overlap

Although the online exchange market is open 24 hours a day during the week, these are the periods which have a greater volume of trade positions, thereby increasing the opportunities to make a profit.

For day traders trading Gold metal online the most productive hours are the London and the New York market session overlaps & this is the peak for financial trades - when these 2 market sessions overlap when there is a large volume of financial transactions and the market is most active.During this overlap a significant amount of fundamental news is released generating a lot of volatility and the Gold prices move fast and there is plenty of opportunities to trade, this overlap offers and provides the best trading opportunity for those wanting to maximize their profit.

The best hours for trading Gold, are during this overlap because the Gold prices really move and the moves are decisive & offer the best chance to earn profits.

This also is why Asian traders, like the Japanese will wait until afternoon to start executing their trading orders; this is the period that will coincide with the Europe and USA sessions.

Asian investors/traders won't open trades during the Asia time, henceforth as an investor from anywhere in the globe it's best stay away also, after all even the hedge funds & other pro traders from Asia will avoid this time and wait until afternoon to trade when it is much easier because of the liquidity during the USA & UK session overlaps.

Therefore to come up with the best hours based on these three sessions is shown below:

Gold Trading Market Hours and the 3 Major Gold Trading Market Sessions - XAUUSD Trading Market Sessions

Market Session Hours & Market Sessions Over-laps

The chart above shows the timetable of when each market session starts & when it ends. The chart also shows when there are session overlaps and also shows the best hours to trade Gold and other instruments based on these over-laps.

Summary:

Determine Your Gold Schedule

The type of XAU/USD trader that you're determines your trading schedule. If you do not have a lot of time then a longer-term Gold trade strategy would suit you best. If on the other hand you have a lot of time then you might decide to set a intraday trading schedule where you open trade transactions during the most active market trading hours. The above chart shows the best GMT times to be trading in the market - from around 800 GMT and 1800 GMT.

Determine Your Time-frame

To set up a schedule you need to figure out your chart time-frame that you will be trading with. Try using different chart time-frames until you find the most suitable/comfortable to use in accordance with your market trading schedule.

Test Your Gold Strategy

Test your trading strategy on a practice demo account for a period of two months or more. Keep track of every trade and monitor the progress of your schedule. Try to analyze what times are most profitable for your Gold trade strategy.

Your strategy should be specified on the XAUUSD trading plan that you use.

To know more about how to specify your strategy on your trading plan, read the tutorial about writing a Gold trading plan. This tutorial guide will show you an example of a format which you can use to specify your schedule.

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