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Chapter 4, Part I. Trading sessions Page 3

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 14, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Second itemThe Tokyo trading session is very similar to the Sydney one. In fact, this trading session also includes the trading times of such large participants as Hong Kong, Singapore, China, Malaysia and others. These markets are showing gradual growth in trading volumes and becoming more and more important.

    Third important item - There is different winter time adjustment in the Southern and Northern hemispheres. You can see that North (New York) adjusts time for 1 hour back and South (Sidney) for 2 hours forward. This happens because seasons are opposite in different hemispheres.


    Here is the same information, but in picture. The overlaps of cross-continental trading sessions (except Sydney + Tokyo) are marked on time scale:


    [​IMG]

    According to the Bank for International Settlements, trading in London accounted for 36.7% of the total, making London by far the most important global center for foreign exchange trading. In second and third places respectively, trading in New York City accounted for 17.9%, and Tokyo accounted for 6.2%. Due to London's dominance in the market, a particular currency's quoted price is usually the London market price.

    The roughest period in the market is during crossing of different trading sessions.
    During this time, more and more participants enter the market and trading volume increases significantly. Mostly important is the overlap of London and New York City sessions, because, as we’ve estimated, it’s more than 50% of overall daily trading volume.

    Now let’s take a look at volatility – the average price range in pips during different trading sessions. Pip is equal to 0.0001 of the exchange rate:

    PairLondonNew YorkTokyo
    EUR/USD1038670
    GBP/USD13110397
    USD/JPY686050
    AUD/USD878480
    NZD/USD797367
    USD/CAD948855
    USD/CHF1048563
    Here we can see that the price movement value is also greater with those sessions that have greater trading volume. The European trading session is the most active as in terms of trading volume as well as in terms of price movement.



    P.S. This lesson was written by Sive Morten, who has been working for a large European Bank since April of 2000, and is currently a supervisor of the bank's risk assessment department. Sive's knowledge of forex market and banking industry is vast and quite complete. If you have any specific questions about forex, banking industry, or any other financial instruments, please post them on the next page and Sive should answer soon.


    Note: FPA ranks are earned in the battles against scam, not in the classroom.
     
    #1 Sive Morten, Dec 14, 2013
    Lasted edited by : Feb 7, 2016
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