Characteristics of the Three Major Trading Sessions: Asia, Europe & America Sessions

Asian Session

During the Asian session only 8 % of the total daily financial trade transactions go through the Tokyo desks. This is the least active of the three major trading sessions. Most of this 8% only involves yen based forex pairs with very little trade transactions happening for other instruments like GOLD. This is the reason why it isn't suitable to trade XAUUSD metal during this period. Not trading this period will save you a lot of time and money.

European Market Session

London/European market session takes the majority share of overall total financial trade transactions, 34 % of all financial trade transactions are carried out during this European market session. London time zone is also well placed in terms of business hours for both eastern and western economies, this is when there are market session overlaps & this results in high number of financial trade transactions during the period. This time is most liquid and most volatile session for all the currency pairs & also Gold metal.

The Europe timezone also includes the euro zone member countries. The Euro zone has 17 members & major banks of these countries are open & there a lot of liquidity as many financial transactions are being executed.

US Market Session

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

European and America Sessions Over-lap

Although the online exchange trading market is open 24 hrs a day during the week, these are the periods that have a greater volume of positions, thereby increasing the opportunities to make a profit.

For day traders Gold metal online the most productive hours are the London & the US market session overlaps & this is the peak for financial transactions - when these 2 market sessions overlap when there is a large volume of financial trade transactions & the market is most active. During this overlap a significant amount of fundamental news is released generating a lot of volatility and the Gold prices move fast and there plenty of opportunities to trade, this over-lap provides the best trading opportunity for those wanting to maximize their profit.

The best hours for trading XAUUSD, are during this overlap because the Gold prices really move and the moves are decisive & offer the best chance to earn profits.

This also is why Asia traders, like the Japanese will wait until afternoon to start executing their trading orders; this is the period that will coincide with the Europe and USA sessions.

Asian traders won't open trade transactions during the Asian time, henceforth as a trader from anywhere in the globe it's best stay away also, after all even the hedge funds & other pro investors from Asia will avoid this time and wait until afternoon to trade when it's much easier due to the liquidity during the America and UK session overlaps.

Therefore to come up with the best hours based on these 3 sessions is shown below:

Gold Market Hours and the 3 Major XAUUSD Trading Market Sessions - XAUUSD Trading Market Sessions

Market Session Hours and Sessions Overlaps

The chart above shows the timetable of when each market session starts and when it ends. The chart also displays when there are session overlaps and also illustrates the best hours to trade Gold and other trading instruments based on these over-laps.

Summary:

Determine Your Gold Trading Schedule

The type of XAU/USD trader that you're determines your trading schedule. If you do not have a lot of time then a longer-term Gold trading strategy would suit you best. If on the other hand you have got a lot of time then you may decide to set a intraday trading schedule where you open trade positions during the most active market trading hours. The above chart illustrates and shows the best GMT times to be trading in the market - from around 800 GMT and 1800 GMT.

Determine Your Chart Timeframe

To set up a schedule you need to determine your chart timeframe that you'll be trading with. Try using different timeframe until when you find the most suitable to use in accordance with your market trading schedule.

Test Your XAU/USD Strategy

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

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

To know more about how to specify your trading strategy in your plan, read the lesson about writing a Gold trading plan. This tutorial will show you an example illustration of a format that you can use to specify your schedule.

Get More Lessons & Tutorials:

Trade Gold Trading