The 3 Major Sessions: Asia, Europe and USA

Asian Session

During the Asia market only 8 percent of the total daily transactions go through Tokyo desks. This is the least active of the 3 major sessions. Most of this 8% only involves yen based gold trading with very little transactions happening for other instruments. This is the explanation why it is not suitable for one 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 total trade transactions, 34% of all transactions are carried out during this market 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 No. of trade transactions during the period. This time is most liquid and most volatile market session for all the trading instruments.

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

USA Session

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

European USA Session Overlap

These are the periods which have a greater volume of trades, therefore increasing opportunities to make a profit.

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

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

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

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

Asian investors won't open gold transactions during the Asia time, therefore as a trader from anywhere in the world it is best to stay away at this time, after all even the hedge funds and other pro traders from Asia will avoid this time & wait for until afternoon when it's a lot easier because of the liquidity during the US & UK overlaps.

Therefore to come up with the best hours using based on these three markets sessions like illustrated and shown below:

Trading Market Sessions and Market Sessions Overlaps

Market Hours & Overlaps

The chart above shows the timetable of when each session starts & when it ends. The chart also displays when there are overlaps and also displays the best hours based on these over-laps.

Summary:

Determine Your Schedule

The type of trader you're 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 got a lot of time then you might & may make a decision to set a intra-day trading schedule where you open gold transactions during the most active market trading hours. The above chart illustrates and shows the best GMT times to be in the market - from around 800 GMT and 1800 GMT.

Determine your timeframe

To setup a schedule you need to determine your chart timeframe. Try using different chart timeframes until you find the most appropriate and suitable to use in accordance to your schedule.

Test your trading strategy

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

Your strategy should be specified on the trading plan which you use.

To learn more about how to specify this in your plan, read the tutorial about Gold plan. This learn gold guide will show you an illustration of a format that you can use to specify your schedule.

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