Trading Sessions in Forex: When to Trade and When Is It Better Not To?

Good day to the readers of our forex blog. This article is intended for beginner forex traders. We will talk about what trading sessions exist in Forex, the session schedule, what time is most favorable for trading Forex, and when it is better to refrain from trades. I will also share with you an indicator for Metatrader 4 that automatically marks session times on the chart.

The Forex currency market operates 24 hours a day, 5 days a week. Since different countries are in different time zones, and large companies constantly need to exchange currencies, Forex, unlike the stock exchange, is open around the clock.

Technically, trading on the Forex market begins on Sunday morning in Tel Aviv and continues until Friday afternoon in New York. However, the Tel Aviv session is so small that it is usually ignored, and real trading begins on Monday morning in Wellington (New Zealand).

However, Wellington is a small venue, so volumes there are also low. Trading really starts to pick up when Sydney and Tokyo wake up, but when the trading center in London opens, the venue with the largest turnover, trading volumes simply soar. When London goes to lunch, New York, the second-largest center for currency transactions, joins the trading. The biggest trading volumes occur during the period when it is daytime in London and morning in New York. Then London closes, and New York remains the main trading center until the end of the day. The slowest trading period is at the junction of New York's close (the American session) and Wellington's open.

Then Sydney opens, and the cycle repeats again.

We all live in different time zones. Russia (at the present time) does not switch clocks for winter / summer time, while Europe and America still do. Therefore, confusion can easily arise regarding Forex trading session times.

To make the session schedule clear and understandable for everyone relative to your local time, I suggest using our trading sessions service. Everything there is intuitive; you only need to set your time zone, and the trading session schedule will immediately rebuild according to your time. There is a visual instruction in the video lesson at the beginning of the article.

The fact that the currency market operates 24 hours a day does not mean that you need to stay at the monitor around the clock. There are active periods when you can earn quite well, and there are quiet periods when it is better not to open trades.

If you trade on daily charts, you can ignore trading sessions. You simply open / close positions at the end of the current daily candle. The same applies to four-hour charts (H4).

But in intraday trading, on charts with a period of 1 hour and lower, the most favorable period for opening trades is from the start of the European session and the first 2-3 hours of the American session. After this period ends, you should close any open trades and forget about trading until the next day.

As promised at the beginning of the post, I am sharing a trading sessions indicator for the MT4 terminal. In general, there are many similar indicators, and we will consider the most popular one - I-sessions.

The indicator is installed according to the standard instructions; you will only need to configure the opening / closing times of the sessions in accordance with your broker's time in the trading terminal (the clock in the "Market Watch" window).

After installing I-sessions on the chart, you will see a picture similar to the screenshot below. The indicator displays the period of each trading session in different colors, as well as the distance in points that the price traveled during the session.

image enlarges on click