by Hass67

Forex trading is an altogether a totally different beast as compared to stock trading. One of the major differences between the forex and stock markets is that forex markets are open 24 hour, 5 days a week while stock markets have fixed timings. For example New York Stock Exchange (NYSE) is open from 9:00 AM to 4:00 Pm. You can only trade stocks at NYSE during this time.

Continuous 24 hour action at the forex markets baffles many new traders. Forex markets have no central exchange. It is an Over the Counter (OTC) market that is spread over various locations in the world.

Now, how to provide a open and close session for each day so that you dont have to sit in front of your computer all day getting yourself exhausted. An ingenious way is to divide the day into three eight hour session.

Further divide each 8 hour session into two 4 hour sessions using a 4 hour chart. This division of 24 hours is logical as there are only three major money centers in the world that have the capacity to move the forex markets.

These three money center that are central to the forex markets are: Asia, London and New York. So by dividing the 24 hours into three sessions we will call each session as the Asian, the London and the New York Session.

Asian Market Session: Sydney, Tokyo, Hong Kong and Singapore are the main cities that participate in this session. Major players are the export corporations and the central banks. Sydney opens and with that the forex markets become alive each day. Most of the price action that takes place in this session is unsustainable and jumpy.

London Session: London is still the forex capital of the world with deep and highly liquid forex market. Paris, Geneva and Frankfurt also are players in this session. The moves that originate in this session are very important keeping in view the amount of money needed to move a market this deep. These moves give you a lot of information about the market sentiments and positions.

New York FX Market Session: New York is second biggest FX market after London. Both of these markets overlap in the morning when New York is opening and London is closing. This is the time for major action.

The following table gives important times of the day that any forex trader needs to know: 00:00 GMT-Sydney Opens. 11:00 GMT-London opens. 15:00 GMT- London becomes very active. 17:00 GMT- London is active and New York opens. 18:00 GMT- London and Europe closes. 19:00 GMT- New York and Chicago getting ready for a close!

This overlapping between London and New York is when major price action takes place and new trends are formed or old trends are reversed. London is the market trend setter in fashion as well as forex.

About the Author:
Mr. Ahmad Hassam is a Harvard University Graduate. His passion is Investing, Stocks and Forex Trading. Discover a revolutionary new Forex Robot.