Did you know that the market never sleeps? Yeah, it buzzes with activity 24/7, offering exciting trading opportunities for enthusiasts. But don’t rush to dive into this whirlpool headlong! It is important to understand that trading times for different assets can vary greatly.

Why? It’s simple: the world is huge, and stock exchanges in different parts of the planet open and close at different times. The secret to success as an experienced trader is understanding these trading sessions.

How does a trading session work?

Imagine a busy market filled with trading in stocks, bonds and commodities. This isn’t just a metaphor, but an accurate description of an exchange session – a period when opportunities for buying and selling securities are open.

Depending on the type of market – be it stocks, futures, bonds or currencies – sessions have their own characteristics and duration. Knowing these subtleties is the key to successful investment decisions, sound strategies and understanding market dynamics.

A standard exchange works as follows: first there is a pre-opening phase, when traders place and adjust their orders. Then comes the peak of activity – the phase of continuous trading, where transactions are concluded. The session ends with the closing phase, where the remaining orders are finalized.

So, what is the duration of a trading session? Answer: One business day in the local financial market, from opening to closing bell. Typically, most markets in the world operate from Monday to Friday, closing on weekends.

This raises the question: how many trading days are there in a year? The exact answer to this question depends on the specific market and country. For example, in the US there are 252 trading days. Having said that, this country has the advantage that most holidays fall on the same day of the week, with the exception of some major holidays such as Christmas. In other countries there is no such pattern, so the number of trading days must be calculated individually for each country.

What influences the market session

Economic and political events. The publication of data on employment indices, GDP, central bank decisions and other key indicators can significantly impact market activity. To minimize the impact of volatility, investors need to monitor the news feed and stay abreast of expected economic events.

Changes in the political sphere, as well as individual political events, may lead to increased market volatility. It is important for traders to monitor such events to accurately forecast potential market movements.

Market sentiment. Market overlap is a period of time when two major markets (for example, Asian and European) are open at the same time. This phenomenon leads to increased trading activity, liquidity and volatility. Increased trading activity during market shutdowns may result in sharper currency fluctuations. This can be either a favorable or unfavorable opportunity for traders, depending on their strategy.

Friday trading. The “Friday sell-off” is a common phenomenon in the stock market, with many traders, both retail and institutional, looking to close out their positions in stocks during the final hours of the trading session on Friday. Traders may want to close positions to avoid holding stocks over the weekend when markets are closed and events may occur that could negatively impact prices. With traders looking to close positions at the end of the week, stock prices could be lower in the final hours of trading on Friday.

Types of trading sessions

There are different types of market hours: regular, post-market and pre-market. Let’s look at each of them.

Regular hours (regular session), also known as the “main trading session”, are the main trading period recognized by the world’s largest exchanges such as the NYSE and NASDAQ. This session runs from 9:30 am to 4:00 pm Eastern Standard Time (EST).

After market hours. An after-hours trading session, also known as an extended trading session, occurs after the close of the trading day on the stock exchange. It provides investors with the opportunity to buy or sell shares at unusual times.

This method of trading allows investors to react to news that occurs outside of the standard trading day, somewhat similar to the dynamic pre-market period.

It is important to note that after-hours stock prices can fluctuate significantly in response to earnings reports and news reports. Placing after-hours trading orders is necessary to quickly buy or sell shares in the event of significant events. In the US, typical after-hours trading occurs between 4:00 pm and 8:00 pm Eastern Time.

Premarket. The preliminary session is the daily procedure preceding the opening of the securities market. It is designed to minimize volatility and determine stock opening prices.

During the pre-market session, which typically lasts from 8:00 to 9:30 a.m. EST, orders are collected, modified, and canceled. During this period, clients have the opportunity to place limit or market orders.

The order collection window may close between 9:07 and 9:08. After it is closed, orders are compared and confirmed.

It is important to note that the preliminary session is where the basis for market opening pricing is laid, making it important for all trading participants.

Where do the main trading sessions take place?

The opening hours of the world’s major exchanges are based on the time zones of important financial centers such as London, New York, Sydney and Tokyo. These 4 time frames see the highest levels of market activity. This is due to the significant participation in the trading of large banks and companies located in these cities.

American trading session (New York). The American session, also known as the New York session, plays a significant role in the global foreign exchange market, accounting for 16% of total foreign exchange trading volume. It begins after the close of the Asian session and during the peak of the European session, covering the period from 8:00 to 17:00 Eastern Standard Time. The New York session opens last among the major trading sessions and is often characterized by high trading volume and volatility, especially during opening and closing hours.

European trading session (London). London, the largest metropolis, occupies a leading position in the global financial and banking system. Some of the world’s largest banks have their headquarters here.

The London session, which accounts for 34% of the total volume of daily currency transactions, is rightfully considered the most significant and largest trading session in the world.

The official trading period will run from 7:30 am to 3:30 pm Greenwich Mean Time (GMT). It should be noted that the increased presence of other capital markets such as German and French contributes to the length of this session.

Asian trading session (Tokyo). The Asian session, also known as the Tokyo session, marks the start of the trading day in global financial markets. During this period, market participants lay the foundations for their trading strategies for the coming day.

The session starts at 21:00 UTC+2 and coincides with the opening of exchanges in Tokyo, Hong Kong and Singapore. The Asian session is the first leg of global trade and may be influenced by economic news from countries in the region such as New Zealand and Australia.

Australian trading session (Sydney). The Australian session, which runs from Monday to Friday, opens at 3:00 pm EST and closes at noon local time. Despite low liquidity, trading of currency pairs is widespread during this period. The maximum trading volume occurs in the early stage of the session.

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