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Abstract:Stepping into the world of foreign exchange trading, especially in the Philippines, may seem daunting at first glance. With the market buzzing 24 hours a day, how does one navigate and choose the right time to trade? Understanding the different Forex sessions and their timelines can make a significant difference in planning your trading strategies and achieving profitable trades. This article will guide Filipino traders and anyone interested in trading during the Philippine Standard Time (PST) through the maze of Forex session times. We'll touch on when you could potentially expect the highest volatility and liquidity for your favorite currency pairs and provide helpful strategies to consider.
Stepping into the world of foreign exchange trading, especially in the Philippines, may seem daunting at first glance. With the market buzzing 24 hours a day, how does one navigate and choose the right time to trade? Understanding the different Forex sessions and their timelines can make a significant difference in planning your trading strategies and achieving profitable trades.
This article will guide Filipino traders and anyone interested in trading during the Philippine Standard Time (PST) through the maze of Forex session times. We'll touch on when you could potentially expect the highest volatility and liquidity for your favorite currency pairs and provide helpful strategies to consider.
Forex Trading Sessions refer to the operational times of the global forex market which operates 24 hours a day during the weekdays. The market is not centralized in a physical location; instead, it takes place on electronic networks of banks, institutions, and individual traders worldwide.
The forex market is divided into four major trading sessions that are named according to the principal financial centers open during those times: Sydney Session, Tokyo Session, London Session, and New York Session. We will explain this in detail in the following articles.
Forex Session | Philippine Standard Time (PST) | Currencies |
Sydney Session | 5:00 AM - 2:00 PM | AUD pairs (AUD/USD, AUD/JPY) |
Tokyo Session | 7:00 AM - 4:00 PM | JPY pairs (USD/JPY, AUD/JPY) |
London Session | 3:00 PM - 12:00 AM | GBP, EUR pairs (GBP/USD, EUR/USD) |
New York Session | 8:00 PM - 5:00 AM | USD pairs |
The best currency pairs to trade in the Philippines often depends on the time of day and the active global market sessions. However, typically, the most popular and highly traded currency pairs among Filipino traders include:
Forex trading is generally not allowed on weekends in the Philippines, or any other country, as the global forex market is closed. The market operates 24 hours a day for five days a week - from 5 p.m. EST on Sunday to 5 p.m. EST on Friday. The market's operation is linked to the operational hours of banks in the various global financial markets, which are typically closed on weekends.
The best time to trade Forex in the Philippines largely depends on the currency pairs you want to trade and their respective market sessions, but generally, the most volatile trading periods occur when two market sessions overlap. Here are some key points to consider:
Tokyo and Sydney Session Overlap (7:00 AM - 2:00 PM PST): If you are trading AUD or JPY pairs, this would be an ideal time since the markets in both Australia and Japan are open. This is when the liquidity and volatility for these pairs can increase, providing more trading opportunities.
Tokyo and London Session Overlap (3:00 PM - 4:00 PM PST): This overlap is brief but can lead to significant movements in the market, especially for pairs containing GBP, EUR and JPY.
London and New York Session Overlap (8:00 PM - 12:00 AM PST): This is arguably the best time to trade Forex in the Philippines, particularly for pairs involving GBP, EUR, and USD. This is the most volatile period of the day as its when the financial powerhouses of London and New York are both active. A large percentage of all forex trading generally happens during this period.
Start of New York Session (8:00 PM PST): It's also worth noting that economic news from the U.S., which can significantly move the market, is typically released at the beginning of the New York session.
Despite the market's round-the-clock functioning, not all hours are equally opportunistic for traders. It's crucial to realize that certain hours offer increased volatility and better chances for profit, primarily influenced by core factors including different time zones, daylight savings adjustments, public holidays, crucial economic events and inter-market overlaps.
Differences in Time Zones: The forex market operates in different time zones across major financial hubs across the world like Sydney, Tokyo, London, and New York. Hence, as one financial market closes, another one opens which accounts for the 24 hours operation of the forex market.
Daylight Savings Time: The adjustment for daylight savings by different regions could slightly shift market hours. This is due to the advancement of the clock during summer months to utilize more daylight and pushing back an hour when winter begins.
Public Holidays: The Forex market might be open 24/7, but it isn't active on certain public holidays like Christmas, New Years Day, and Easter. Trading on these days can be unpredictable due to lower participation.
Economic Events: Important economic data releases and events can lead to increased volatility in the market. News related to interest rates, unemployment rates, economic policy changes, or economic crises can lead to significant movements in the forex market.
Market Overlaps: The most volatile trading times in the forex market occur during overlaps between the different trading sessions when there are increased numbers of participants trading, leading to higher transaction volumes and volatility.
Trading strategies during different session times generally revolve around the knowledge of which sessions offer the highest liquidity and volatility for specific currency pairs. Here are a few strategies:
Choosing the best trading hours can be a critical factor for success, particularly for novice traders. The best hours typically depend on your trading strategy, the currency pairs you're focusing on, and your personal circumstances. Here are four tips for novice traders to choose the best trading hours:
Disclaimer:
The views in this article only represent the author's personal views, and do not constitute investment advice on this platform. This platform does not guarantee the accuracy, completeness and timeliness of the information in the article, and will not be liable for any loss caused by the use of or reliance on the information in the article.