For the more risk-tolerant traders, there are plenty of pairs to choose from EUR/USD, USD/CAD, GBP/USD, and USD/CHF, with an average range of 80 pips, are ideal picks as their high volatilities offer an abundance, of opportunity to enter the market. As mentioned earlier, trade between the European currencies and the dollars picks up again because the large participants have to reshuffle their portfolios for the opening of the U.S. session.
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For the more risk-tolerant traders, there are plenty of pairs to choose from EUR/USD, USD/CAD, GBP/USD, and USD/CHF, with an average range of 80 pips, are ideal picks as their high volatilities offer an abundance, of opportunity to enter the market. As mentioned earlier, trade between the European currencies and the dollars picks up again because the large participants have to reshuffle their portfolios for the opening of the U.S. session.
For the more risk-tolerant traders, there are plenty of pairs to choose from EUR/USD, USD/CAD, GBP/USD, and USD/CHF, with an average range of 80 pips, are ideal picks as their high volatilities offer an abundance, of opportunity to enter the market. As mentioned earlier, trade between the European currencies and the dollars picks up again because the large participants have to reshuffle their portfolios for the opening of the U.S. session.
For the more risk-averse participants, the NZD/USD, AUD/USD, EUR/CHF and AUD/JPY, with an average of about 50 pips, are good choices as these pairs provide trader with high interest incomes in additional to potential trade profits. These pairs allow investors to determine their direction of movements based on fundamental economic factors and be less prone to losses due to intraday speculative trades.
U.S. Session 13.30-20.00 UTC.
New York is the second largest FX market place, encompassing 19 percent of total FX market volume turnover according to the 2004 Triennial Central Bank Survey of Foreign Exchange and Derivatives Market Activity in April 2004 published by the Bank for International Settlements (BIS). It is also the financial center that guards the back door of the world's FX market as trading activity usually winds down to a minimum from its afternoon session until the opening of the Tokyo market the next day. The majority of the transactions during the U.S. session are 51 executed between 8 a.m. and noon, a period with high liquidity because European traders are still in the market.
New York is the second largest FX market place, encompassing 19 percent of total FX market volume turnover according to the 2004 Triennial Central Bank Survey of Foreign Exchange and Derivatives Market Activity in April 2004 published by the Bank for International Settlements (BIS). It is also the financial center that guards the back door of the world's FX market as trading activity usually winds down to a minimum from its afternoon session until the opening of the Tokyo market the next day. The majority of the transactions during the U.S. session are 51 executed between 8 a.m. and noon, a period with high liquidity because European traders are still in the market.
Trading activities in these currency pairs are particularly active because these transactions directly involve the U.S. dollar.
When the U.S. equity and bond markets are open during the U.S. session, foreign investor have to convert their domestic currency, such as the Japanese yen, the euro, and the Swiss franc, into dollar-dominated assets in order to carry out their transactions. With the market overlap, GBP/JPY and GBP/CHF have the widest daily ranges.
When the U.S. equity and bond markets are open during the U.S. session, foreign investor have to convert their domestic currency, such as the Japanese yen, the euro, and the Swiss franc, into dollar-dominated assets in order to carry out their transactions. With the market overlap, GBP/JPY and GBP/CHF have the widest daily ranges.
When the U.S. equity and bond markets are open during the U.S. session, foreign investor have to convert their domestic currency, such as the Japanese yen, the euro, and the Swiss franc, into dollar-dominated assets in order to carry out their transactions. With the market overlap, GBP/JPY and GBP/CHF have the widest daily ranges.
Most currencies in the FX market are quoted with the U.S. dollar as the base and primarily traded against it before translating into other currencies. In the GBP/JPY case, for a British pound to be converted into Japanese yen, it has to be traded against the dollar first, then into yen. Therefore, a GBP/JPY trade involves two different currency transactions, GBP/USD and USD/JPY, and its volatility is ultimately determined by the correlations of the two derived currency pairs.
Since GBP/USD and USD/JPY have negative correlations, which means their direction of movements are opposite to each other, the volatility of GBP/JPY is thus amplified. USD/CHF movement can also be explained similarly but has a greater intensity. Trading currency pairs with high volatility can be very lucrative, but it is also important to bear in mind that the risk involved is very high as well.
For the more risk-averse traders, USD/JPY, EUR/USD, and USD/CAD appear to be good choices since these pairs offer traders a decent amount of trading range to gamer handsome profits with a smaller amount of risk. Their highly liquid nature 53 allows an investor to secure profits or cut losses promptly and efficiently. The modest volatility of these pairs also provides a favorable environment for traders who want to pursue long-term strategies.
U.S. - European Overlap 13.30-16.00 UTC
The Forex markets lend to be most active when the hours of the world's two largest trading centers overlap. The range of trading constitutes on average 70 percent of the total average range of trading for all of the currency pairs during the European trading hours and 80 percent of the total average range of trading for all of the currency pairs during U.S. trading hours. Just these percentages alone tell day traders that if they are really looking for volatile price action and wide ranges and cannot sit at the screen all day, the time to trade is the U.S. and European overlap.
The Forex markets lend to be most active when the hours of the world's two largest trading centers overlap. The range of trading constitutes on average 70 percent of the total average range of trading for all of the currency pairs during the European trading hours and 80 percent of the total average range of trading for all of the currency pairs during U.S. trading hours. Just these percentages alone tell day traders that if they are really looking for volatile price action and wide ranges and cannot sit at the screen all day, the time to trade is the U.S. and European overlap.
European - Asian Overlap 07.00 –09.00 UTC
The trade intensity in the European-Asian overlap is far lower than in any other session because of the slow trading during the Asian morning. With trading extremely thin during these hours, risk-tolerant and risk-loving traders can take a two-hour nap or spend the time positioning themselves for a breakout move at the European or U.S. open.
The trade intensity in the European-Asian overlap is far lower than in any other session because of the slow trading during the Asian morning. With trading extremely thin during these hours, risk-tolerant and risk-loving traders can take a two-hour nap or spend the time positioning themselves for a breakout move at the European or U.S. open.
Strategically important moments of the trading day
UTC/GMT; DST (Winter time)
Sunday 21:00 (22:00) - Opening of the Trade
rollback after Friday; it is better to watch the terminal closely
21:00 DST (22:00) - opening of the trading session in Wellington (New Zealand) nothing happens, the trading is slack.
23:00 DST (24:00) - opening of the trading session in Sydney, the trade becomes more brisk in anticipation of Tokyo trading session opening in an hour.
Before Tokyo freely two transactions may be made (to both sides; with profit of 5-10 pips)
UTC/GMT; DST (Winter time)
Sunday 21:00 (22:00) - Opening of the Trade
rollback after Friday; it is better to watch the terminal closely
21:00 DST (22:00) - opening of the trading session in Wellington (New Zealand) nothing happens, the trading is slack.
23:00 DST (24:00) - opening of the trading session in Sydney, the trade becomes more brisk in anticipation of Tokyo trading session opening in an hour.
Before Tokyo freely two transactions may be made (to both sides; with profit of 5-10 pips)
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