Forex Market Sessions

Tweet

Forex Market Sessions and Time-Zones

The Foreign Exchange market is open and active 24 hours a day, 5 days per week. This unique feature allows Forex investors in all over the world to trade during their normal hours.

Two Time Zones

There are two Forex time zones (Summer and Winter):

1. Summer Zone (April – October)
2. Winter (approx. October – April)

Forex Market Sessions

Currencies trade 24 hours a day, 5 days a week. This round the clock trading process exists due to different time zones where markets operate in the four corners of the world.

The Foreign Exchange market is divided into four main sessions: the European, the North American, the Australian, and the Asian sessions. Alternatively, these sessions are called as the London, New York, Sydney, and Tokyo sessions. As it was mentioned before, there are two time zones (Winter and Summer Zones).

(a) WINTER ZONE (OCTOBER-APRIL)

◙ EST (US) WINTER TIME ZONE

Typical EST/EDT Forex Winter Trading Hours:

• London Session: from 3:00 am to 12:00 pm EST
• New York session from 8:00 am to 17:00 pm EST
• Tokyo session from 18:00 pm to 3:00 am EST
• Sydney session from 16:00 pm to 1:00 am EST

◙ GMT (UK) WINTER TIME ZONE

Typical GMT Forex Winter Trading Hours:

• London session from 08:00 am to 17:00 pm GMT
• New York session from 13:00 pm to 22:00 pm GMT
• Tokyo session from 23:00 pm to 08:00 am GMT
• Sydney session from 21:00 pm to 06:00 am GMT

Read more: Forex Market Sessions

Forex Carry Trade

Tweet

Introduction to Forex Carry Trade

Carry Trade is an effective long-term trading strategy and a strong force driving key Forex trends.

What is Forex Carry Trade?

Forex Carry Trade means selling a low-interest rate currency and buying the same amount of a high-interest-rate currency. The concept is to make money based on the interest-rate differential.

Popular Currencies for Carry Traders

A carry trade will go long on currencies such as the New Zeeland Dollard, the Australian dollar, or the Turkish Lira, and go short on currencies such as the Japanese yen and the Swiss Franc. The most popular currency pairs for carry trading are:

■ AUD/JPY, NZD/JPY, EUR/JPY, USD/TRY, and GBP/CHF

Carry Trade can also mean borrowing in a low-interest rate currency, converting it to a high-interest-rate currency, and buying the highest rated bonds (check the Yen Carry Trade below).

When Central Banks Change their Rates?

Carry trades can prove very effective when central banks increase or plan to increase the level of domestic interest rates. Central banks change the level of the domestic interest rates aiming to achieve long-term financial stability and growth.

(↑) Why Central Banks Increase Interest Rates?

• To respond to high inflation (by reducing the money supply)
• To deal with capital shortage (by making the rates more attractive to foreign investors)
• To deal with political or financial turmoil that may have caused an aggressive currency devaluation

Read more: Forex Carry Trade