INTRODUCTION TO FOREX MARKET SESSIONS

FX-HATS SYNDICATE

OBJECTIVE 1.What is a forex market session?

2. what are the major market sessions?
3. the open and close time of FOREX sessions.
4. forex market sessions overlap.
5. the best trading sessions.
6. currency pairs to trade during which session.

WHAT IS A FOREX Forex session is typically the time in which the forex market is open for
MARKET SESSION? trading. It runs 24hours a day and 5 days a week ranging from 22:00 GMT
Sunday when SYDNEY SESSION starts to 22:00 GMT on Friday where NEW
YORK SESSION ends before closing. Therefore; for a person in Nigeria;
whose time is GMT+1, trade opens Sunday 23:00 GMT (11PM) to Friday
23:00 GMT (11pm).

WHAT ARE THE THE MAJOR MARKET SESSIONS ARE FOUR IN NUMBER, NAMELY;
MAJOR FOREX
SESSIONS?

SYDNEY SESSION:
Also called the “AUSTRALIAN SESSION”
This session is the session that encompasses trading activities of banks and inter-banks in
the Australian continent. The major currency traded during this session is NZD and AUD
commonly called the “KIWI” and the “AUSSIE” respectively.

TOKYO SESSION:
Also called the “ASIAN SESSION”
This session is the session covering all trades don on the Asian side of the forex market, the
major currency traded during this period is the JPY.

LONDON SESSION:
Also called the “EUROPEAN SESSION”
This is the session covering all the trades done on the European side of the
forex market, the major currencies traded during this time are the EUR,
CHF and GBP.
NEW YORK SESSION
Also called the “NORTH AMERICAN SESSION”
This session is the session encompassing all trades done on the north American forex
market side. The currencies used mainly are USD and CAD.
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THE OPENING AND THE FOREX MARKET SESSION OPEN AND CLOSE AT CERTAIN TIMES WHICH ENABLE US TO
CLOSING TIMES OF TRADE VERY EFFECTIVELY; THIS TIMES ARE AS FOLLOWS:
THE FOREX MARKET Forex is trade all around the world, but the major areas where it occurs has been
SESSIONS. categorized into 4 sessions, each named after the trade “hubs” of this areas. Now each of
this session has its own time in which the session is active, that is the time in which banks in
such areas are active. The following are the times in which these sessions are open.

SYDNEY SESSION:
This session opens by 22:00 GMT and closes by 7:00 GMT which translates to 23:00 GMT
(11PM LNT) to 8:00 GMT (8AM LNT).

TOKYO SESSION:
This session opens by 24:00 GMT and closes by 9:00 GMT which translates to 1:00 GMT
(1AM LNT) to 10:00 GMT (10AM LNT).

LONDON SESSION:
This session opens by 8:00 GMT and closes by 17:00 GMT which translates to 9:00 GMT
(9AM LNT) to 18:00 GMT (6PM LNT).

NEW YORK SESSION:

This session opens by 13:00 GMT and closes by 22:00 GMT which translates to 14:00 GMT
(2PM LNT) to 23:00 GMT (11PM LNT).

LNT stands for local Nigerian time which is our time system in Nigeria which is GMT+1.

FOREX MARKET Now there are times in which forex is been traded simultaneously in 2
TIME OVERLAPPING markets. Where either the Sydney session laps the Tokyo session, or Tokyo
session laps the London session, or even the London session laps the New
York session but never does the Sydney session lap with the New York
session.
❖ The Sydney session overlaps with the Tokyo session from 1AM
LNT till 8AM LNT.
❖ The Asian session then overlaps briefly with the London session
from about 9AM LNT till 10AM LNT.
❖ The London session overlaps with the New York session from
around 2PM LNT till 6PM LNT.

THE BEST TRADING So a critical look at all this leaves us with more than 4 sessions, which are;
SESSIONS. I. The pure Sydney session which runs from 11PM LNT till 1AM
LNT.
II. The S.S/A.S lapping session which runs from 1AM LNT until
8AM LNT.
III. The pure Asian session which runs for a short while from 9AM
LNT and closes by 10AM LNT.

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IV. The A.S/L.S lapping session which is open from 9AM LNT till
10AM LNT
V. The pure London session this is the session that runs from
10AM LNT till 2PM LNT.
VI. The L.S/N.S lapping session which spans from 2PM LNT to
6PM LNT.
VII. The pure New York session which closes a trading day from
6PM LNT to 11PM LNT.

NOW NOTE: USD is the reserve currency for forex trading and
hence it is suitable to trade anytime.

CURRENCY PAIRS TO GENERALLY, THERE ARE 8 MAJOR CURRENCIES IN FOREX MARKET NAMELY;
TRADE DURING 1. THE UNITED STATES DOLLAR (USD)
WHICH SESSION. 2. THE CANADIAN DOLLAR (CAD)
3. THE EUROPEAN ZONE EURO (EUR)
4. THE JAPANESE YEN (JPY)
5. THE AUSTRALIAN DOLLAR (AUD)
6. THE NEW ZEALAND DOLLAR (NZD)
7. THE SWITZERLAND FRANC (CHF)
8. THE BRITHISH POUND (GBP)
Out of these currencies there are 28 major pairs that can be traded in the forex market.
They are:

1) AUD/CAD
2) AUD/NZD
3) AUD/CHF
4) AUD/JPY
5) AUD/USD
6) CAD/JPY
7) CAD/CHF
8) CHF/JPY
9) EUR/AUD
10) EUR/CAD
11) EUR/CHF
12) EUR/GBP
13) EUR/JPY
14) EUR/NZD
15) EUR/USD
16) GBP/AUD
17) GBP/CAD
18) GBP/CHF
19) GBP/JPY

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20) GBP/NZD
21) GBP/USD
22) NZD/CAD
23) NZD/CHF
24) NZD/JPY
25) NZD/USD
26) USD/CAD
27) USD/CHF
28) USD/JPY

Out of which 7 of the pairs stand out on their own, they are as follows:

1) THE EURO/DOLLAR (EUR/USD)

This currency pair is the most traded pair in the world, due to its widened appeal with the EUR and the USD.
It is impacted by the following mainly:
• High impacting announcements from the European Central Bank and the US Federal Reserve
2) THE DOLLAR/ JAPANESE YEN (USD/JPY)
This pair has a large trading volume because Japan is one of the largest net exporters in the world, which means
huge volumes of businesses would exchange into and from the JPY. But keeping in mind that USD is the reserve
currency for FOREX.
3) THE BRITISH POUND STERLING/US DOLLAR (GBP/USD)
Commonly referred to as the “CABLE” because of the large cable that runs across the Atlantic Ocean connecting
USA and UK. It is one of the most traded pairs thanks to the large volume of business between the United States
and the United Kingdom.
4) THE US DOLLAR/SWISS FRANC (USD/CHF)
Commonly referred to as the “SWISSIE”, the USD/CHF is considered as a safe haven currency in which investors
would put their money when the markets are extremely volatile and uncertain.
5) THE AUSTRALIAN DOLLAR/US DOLLAR (AUD/USD)
Commonly called the “AUSSIE”, this pair is here because Australia is a large exporter of coal and iron ore. This
means that this pair is affected mainly by:
• The market price of coal, and
• The price of iron ore in the market.
6) THE US DOLLAR/ CANADIAN DOLLAR (USD/CAD)
Popularly called the “LOONIE”, this pair is here because Canada’s economy is an economy that is largely dependent
on the price of commodities. It has huge reserves of timber, natural gas and oil. This mean that this pair is affected
by:
• The price of timber in the market,
• The price of oil in the market, and
• The price of natural gas in the market.
7) THE NEW ZEALAND DOLLAR/US DOLLAR (NZD/USD)
This pair is commonly called the “KIWI”, it is here because New Zealand is the largest exporter of dairy based
products, which means that the NZD/USD is dependent on the price of milk, so if milk price should go up, then this
pair tends to follow.

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So, by mere looking of the 28 major pairs, in comparison to the 7 trading times, the following are the best pairs to
trade at each trading session.

i) The pure Sydney session (11PM LNT –1AM LNT):

1) AUD/USD
2) NZD/USD
3) AUD/NZD
4) Any other AUD or NZD currency pair combination.
ii) The Sydney-Tokyo lap session (1AM LNT – 8AM LNT):
1) AUD/USD
2) NZD/USD
3) AUD/NZD
4) AUD/JPY
5) NZD/JPY
6) USD/JPY
iii) The pure Tokyo session (8AM LNT – 9AM LNT):
1) USD/JPY
2) Any other JPY currency pair combination.
iv) The Tokyo-London lap session (9AM LNT – 10AM LNT):
1) USD/JPY
2) GBP/USD
3) EUR/USD
4) USD/CHF
5) GBP/JPY
6) EUR/JPY
7) CHF/JPY
8) Any other GBP, EUR, CHF and JPY combination.
v) The pure London session (10AM LNT – 2PM LNT):
1) GBP/USD
2) EUR/USD
3) USD/CHF
4) EUR/GBP
5) EUR/CHF
6) GBP/CHF
7) Any other EUR, GBP and CHF combination.
vi) The London-New York lap session (2PM LNT – 6PM LNT):
1) EUR/USD
2) GBP/USD
3) USD/CHF
4) EUR/CAD
5) GBP/CAD
6) CAD/CHF
7) EUR/GBP
8) EUR/CHF
9) GBP/CHF
10) Any other EUR, GBP, CHF, USD and CAD currency pair combination.
vii) The pure New York session (6PM LNT – 11PM LNT):
1) USD/CAD

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2) Any other USD or CAD combination

SUMMARY
1. What is a forex market session.
2. State the major forex market sessions.
3. State the GMT and LNT Opening and Closing time of each of these major Forex market
sessions.
4. What do you understand by the phrase “overlapping of forex market sessions”?
5. Following the concept of overlapping, we have 7 market sessions, state each of them,
their Opening and Closing times in GMT and LNT.
6. State the 8 major currencies we have in the Forex market and why they are considered
major currencies.
7. State which of the currency pairs are referred to as:
• Aussie
• Kiwi
• Loonie
• Cable
• Swissie
8. State15 out of the 28 major currency pairs we have in the forex market.
9. State at least 3 currency pairs each we can trade in the following sessions
The pure London session
The Sydney-Tokyo lap session
The London-New York lap session
The pure Tokyo session
The pure Sydney session
The Tokyo-London lap session
The pure New York lap session
10. News concerning the following is likely to affect the movement of which currency pair?
❖ The price of iron ore.
❖ The price of milk and cheese.
❖ The price of timber
❖ The price of coal
❖ The 4th of July USA independence
❖ The price of natural gas
❖ News from the European Central Bank.

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