Trading forex in the American session
How to trade the American forex session
Over the last few years the popularity of Forex trading has grown in leaps and bounds. It has turned from simply being an invested opportunity known to banks and big trading corporations to one that is the most invested by retail investors too. Among so many other reasons that shot it into the limelight is the ability to trade the market at any time of the day. It is open 24 hours of the day on weekdays so people can trade the markets based on their own schedule.
Trading Sessions in Forex
There are several time zones in the world and this means that there are different trading sessions. The sessions include the New York session, often referred to as the American session, the European Session referred to as the London session, and the Asian session referred to as the Tokyo session. Among these three the American session is the most exciting. The reason for this is that it begins 7 hours into the London session and so the two sessions are open at this time and it is natural to witness an increase in volatility. This means more trading opportunities.
The American session is open from 14:00 GMT to 23:00GMT. During this time both major and non-major pairs move heavily. Some of the most popular pairs traded at this time include the EURUSD, USDCAD, AUDUSD, GBPUSD, USDCHF, USDJPY, NZDUSD, Oil and Gold.
When, people hear that the forex market is a 24 hour operation the immediate tempatation is to trade non-stop round the clock, but this shouldn’t be the case. Of course it is very possible to trade in this manner but traders generally prefer to stick to one or two timeframes taking opportunities that present themselves at these times. The most popular way people trade is to resume trading at the European open and also at the European close. This way they get to trade at the most important time of the day, which is the time when the two timeframes overlap, 1400-1800 GMT.
The American session is very important to traders because it is the time that sees the largest number of fundamental forex news releases. This means that anyone trading at this time must be aware of these releases or else he or she could hit unexpected losses.
The releases are much enjoyed by traders as they normally provide the spark the markets need to move. Some of the biggest releases you should watch out for during this time include the US Home sales, the CPI, the PPI, the trade balance, the unemployment data and the Non-farm payroll report; the latter is unquestionably the biggest of them all. You can look around online for places where you can find the time at which these reports are expected.
As an intraday trader, you need to take the news times seriously as it affects you the most. A long term trader doesn’t need to do this though as he is not concerned with the short bursts of volatility that happen all through the day but rather is focused on the longer term trends
Get a free Forex PDF PLUS:
- 14 Video Lessons
- Free One-on-One Training
- A 5000$ Training Account
- In-House Daily Analysis
- Get FULL ACCESS