Influence Of Different Sessions On The Currency Movement.
Although the foreign exchange market does not have an official center, London with its 200 dealers who are willing to do the weather on any free convertible currency in the world is the heart and soul of Forex. Situated between Asia and North America, London is a huge financial broker, 35% of trading volume is accounted for London session. European session starts at 2:00 EST, it is known for its irregular movements. As in London a lot of dealers work, exposing orders, the first movement during the European session is typically spurious, as they try to identify places of accumulation of stops, support and resistance levels.
This dynamic is known as “London hoax”. Dealers and traders are trying to define how far the price can go, verify the market potential. Certainly, sometimes the first movement in the course of the London session is true, since everybody joins it; it is a new trend that usually lasts until early U.S. session.
As far as London is the largest pool of liquidity, the spread in the course of this session compresses very much. For EUR / USD pair it can be only 1.5 pips, while for the pound 3 pips or less. The European session is a good opportunity for short-term trading, because in this period volatility grows, and the spread narrows.
Between 4 and 5 EST it is published the most of the European data. Unexpected news in the British economy may cause strong motions on a chart GBP / USD. As a result of news surprises, this pair can do the movement upwards or downwards by 40 pips or more. If the news is surprising, then the motion can be 100 points. A key lesson from the above: regardless of whether you are orientating on a technique or fundamental, you have to analyze the economic calendar and the potential risks. I’ve seen a countless quantity of technical speculators, who claimed that “the news is not significant.” These traders open positions on the news, their positions are often closed at the stop of the post-news movements, and then they observe in frustration at how the deal is moving in the direction of their position.
It is the best to refrain from opening the position prior to the news and trade after its outlet. Although, if you are willing to risk and you have a good flair for economic predictions, you can earn good money in short-term opportunities that news provide.
When at 7:00 EST U.S. session starts, it is very often the direction of price alters. This change is connected with a change of focus from the European market news on the U.S.
In this competition the U.S. data almost always win, because it is the dollar stays the world’s reserve currency. Very often the pair EUR / USD rises to the opening of trading in the U.S. on good news on the Eurozone only to turn around in the contrary direction if the U.S. data would be good. These swings are often incomprehensible for technical traders, but it is important for you to understand how speculative flows affect the market.
Currently people are searching for additional or even primary sources of income as never. World economy is still in tough condition, and to find a well-paid job is quite hard. And forex is one of the ways to earn some money. To trade successfully one needs to know events on the market, so forex news is of great help here. Those who don’t know where to get fx news can make use of the web network. Just type “forex news trading“, for example, in Google or other search engine and you will get many news sources to choose from.