FINA3307 Trading Game

Trading Sessions

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Table of Contents

Introduction. 2

Discussion. 2

Conclusion. 5

References. 6

Introduction

Foreign exchange or Forex, can be explained as a network of buyers and sellers, who transfer currency between each other at an agreed price. The Forex market is open 24*7 only except on weekends. Forex hour’s indicates to the set out time period when participants are allowed to enact in the Forex.

Discussion

Discussion on Asian trading sessions

Those who want to experience successful trading sessions should learn about the specifics of the market. At the time when the weekend is over, the Asian markets are the first to start trading and the first to experience the effect of the cash flow return to the forex market. This is why a great number of traders based in Europe or us follow the results of the end of the Asian session. This helps them to spot their plan of action that will help them during their respective trading sessions. There are hardly any key Asian session elements to keep in mind.

One of the major key features of the Tokyo trading session is its low cash flow. Some sessions offer more trading opportunities, with many considering the overlap of the New York and London sessions for the most liquid period of the day (Khoa & Huynh, 2021). This is due to the record number of traders who trade USD and euro based currency pairs during these sessions. since these pairs throughout the sessions. Since these pairs are not traded during the session, a great number of traders think about it as less cash flow.

Figure 1: Asians and European trading sessions

Source: (Ji, Zhang & Zhao, 2021)

The period when the Asian markets are open, that time is called the Asian session. It is considered that the Asian hours started from 11p.m and run until 8 a.m. The session starts from 6 p.m to 3 a.m as per Eastern Standard Time. Some biggest movements are notified in pairs during the session, are- AUD/JPY, NZD/JPY, USD/JPY, GBP/JPY. At the time when talking about this session, it often referred to the Japanese or Tokyo session as it is the third-largest trading centre. The trading period is operated by the Asian traders.

The Sydney and Tokyo session have made up this session. Not only that, this session is longer than any other session. As well as this session is the earliest session of a treading day this has given. This session is apprised most among all forex sessions because it is available 24/7. So, anyone can dive into this session from anywhere in the world. The key features of this session are lower liquidity and low volatility (Hartley, van Santen & Kirchherr, 2020). These advantages pay attention to the experienced traders when they want to enjoy successful forex trading.

The Asian market is the first market that start trading after the weekend and experienced the effect of the facilities of the fx market. That’s why many traders of Europe and the US follow the result of the end of this session. Sometimes, some big opportunity came out after the end of this session. Anyone can learn more about this trading session and make the right trading strategy by searching and checking the article in Trading Pedia. It will help to cover all the important characteristics of this trading session.

Discussion on European trading session

As Asian sessions begin to decline, trading days in Europe continue through major economic hubs. The forex session of European takes over in retaining the energetic forex marketplace simply earlier than the Asian buying and selling sessions end. This FX time region is very profound and consists of some essential economic markets. The honours in identifying the boundaries for the European session have been taken by London to date. This buying and selling length is likewise accelerated because of the presence of the different capital markets such as Germany and France (Caporale & Plastun, 2020).

It happened earlier than the legit open withinside the U.K., whilst the closing of the period is forced back as volatility endures till after the closing. While talking about the European session, what this means, the London session, because London accounts for 36.7% of the complete buying and selling volume. It is the prime economic and trading centre in the world, concerning forex trading. In addition, the volume of trade that is offered by London as a hub is much larger than that offered by Tokyo and New York jointly. The European session usually continues from 7 a.m. to 8 p.m.

The trading session declares the time when the business will start. Now Europe accounts for 36.7% of the world and Europe has become a prime centre for business. Nowadays the European business market has a great significance as this trade side has a great volume in the world. The European session usually starts from 7a.m to 8 p.m. Asian or European business sessions begin from their standard time. Europe can direct the world for business. London spreads their market through the world (Hofmann, Kolcava & Thaler, 2022).

Europe is not only a business market but also it directs the world. It has become a great volume in the world. their products are spread around the world. The day traders are making an entry into the European market. The European business market is now a prime centre. While the Asian market searches for its exit in the market, the European trading market has already entered the market. Though Tokyo and New York have a great mark in the market, they are unable to defeat the European market. The European market has succeeded in the trading market in the world. It has a great result in the market. Many other business centres are Frankfurt, Amsterdam, Milan and they operate a great system in the world.

Conclusion

Based on the above discussion it is clear that trading throughout the session overlap can be a better choice if the action of substantial price is more desired. The subsequent step is to determine the best time for trading. A dealer will then decide what time frame is most lively for his or her desired buying.

References

Caporale, G. M., & Plastun, A. (2020). Daily abnormal price changes and trading strategies in the FOREX. Journal of Economic Studies. DOI: https://doi.org/10.1108/JES-11-2019-0503

Hartley, K., van Santen, R., & Kirchherr, J. (2020). Policies for transitioning towards a circular economy: Expectations from the European Union (EU). Resources, Conservation and Recycling, 155, 104634. DOI: https://doi.org/10.1016/j.resconrec.2019.104634

Hofmann, B., Kolcava, D., & Thaler, P. (2022). The Role of Switzerland in European Electricity Governance. In Swiss Energy Governance (pp. 67-92). Springer, Cham. DOI: https://doi.org/10.1007/978-3-030-80787-0_4

Ji, Q., Zhang, D., & Zhao, Y. (2021). Intra-day co-movements of crude oil futures: China and the international benchmarks. Annals of Operations Research, 1-27. DOI: https://doi.org/10.1007/s10479-021-04097-x

Khoa, B. T., & Huynh, T. T. (2021). Is It Possible to Earn Abnormal Return in an Inefficient Market? An Approach Based on Machine Learning in Stock Trading. Computational Intelligence and Neuroscience, 2021. DOI: https://doi.org/10.1155/2021/2917577