Characteristics of the 3 Major Sessions: Asia, Europe and USA

Asian Market Session

During the Asia market only 8 % of the total daily trade transactions go through Tokyo desks. This is the least active of the three major sessions. Most of this 8% only involves yen based xauusd with very little transactions happening for other xauusd. This is the reason why it is not suitable to trade during this period. Not trading this period will save you a lot of time & money.

European Session

The London/European market takes the lion's share of the overall total trade turnover transactions, 34 % of all trade transactions are carried out during this session. London time zone is also well placed in terms of business hours for both eastern & western economies, this is when there are market overlaps and this results in high number of trade transactions during the period. This time is most liquid & most volatile session for all the xauusd.

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

US Market Session

The US market takes up 20 % of all trade transactions. The most active time for trading is approximately from 8 am to 12 pm when both London & New York dealing desks are open. This is when there is generally the highest volatility as it's also when most of the major USA economic announcements are released.

European USA Market Session Over-lap

These are the market periods that have a greater volume of trades, thereby increasing opportunities to make profit.

For day traders the most productive hours are the London and the USA session overlaps & this is the peak for trades is when these 2 over-lap when there is a big volume of transactions and the market is most active.

During this over-lap a substantial amount of economic news data is released generating a lot of price volatility & the prices move fast and there is plenty of opportunities to open trades, this over-lap offers the best market opportunity for those traders wanting to maximize profit.

The best hours for trading, are during this market over-lap because the prices really move and the moves are decisive and offer the best chance to make profits

This also is why Asian traders, Japan will wait until afternoon to start executing their orders, this is the period that will coincide with the Europe & US market sessions.

Asian traders won't open xauusd transactions during the Asia time, thenceforth as a trader from anywhere else in the globe it's also best to stay away from the market during this time, after all even the hedge funds and other pro investors from Asia will avoid this time and wait for until afternoon when it is much easier due to the liquidity during the US & UK overlaps.

Therefore to come up with the best hours using based on these 3 marketmarket sessions such as shown below:

Characteristics of the 3 Major Market Trading Sessions - Market Trading Times

Market Hours and Overlaps

The chart above displays the time table of when each market session starts and when the session ends. Chart also displays when there are overlaps and also illustrates the best hours based on these over-laps.

Summary:

Determine Your Schedule

The type of trader you are determines your schedule. If you don't have a lot of time then a longer-term strategy would suit you best. If on the other hand you've a lot of time then you may decide to set a intraday trading schedule where you open xauusd transactions during the most active market 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 setup a schedule you need to identify your chart time=frame. Try using different chart timeframes until you find the most suitable & suitable/comfortable to use in accordance with your schedule.

Test your strategy

Test your strategy on a practice practice trading account for a period of time. Keep track of every transaction and monitor the progress of your schedule. Try to analyze what times are the most lucrative for your trade strategy.

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

To learn & know more about how you can specify this in your plan, study the tutorial about XAUUSD plan. This learn xauusd tutorial will show you an example of a format that you as a trader can use to specify your schedule.

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