Indices Trading Market Hours and The 3 Major Indices Sessions
London Close Charts
To maximize the number of trading opportunities during these Indices hours, it is important to be aware of the times when the stock indices trading market is busiest. This is the time that most indices trade activity forms.
Even though there is no official open and close time during the week, it can be broken up into 3 major Indices sessions - Tokyo, London and New York sessions.
However, although it seems not to be very important at the beginning, the right time to trade is one of the most crucial points required to be a successful trader.
The best time is when the stock indices trading market is most active and therefore has the biggest volume of transactions. A more active market creates a good chance to make some profit while a calm and slow one is literally a waste of time - turn off your computer and don't even bother indices trading at this time.
Not all the times are suitable, that's because the volatility keeps changing. Below is a table outlining the schedule of Indices Sessions. The time used is GMT 0
The 3 major sessions are:
- Asian Session Hours( Tokyo ): 00:00 - 9:00 GMT
- European Session Hours( London ): 7:00 - 17:00 GMT
- U.S. Session Hours( New York ): 13:00 - 22:00 GMT
Indices Sessions Overlaps
There are hours when 2 sessions are overlapped:
London + Tokyo overlap - 7:00 - 9:00 GMT
New York + London overlap - 13:00 - 17:00 GMT
At these overlapping market hours you will find the highest volume of indices trading transactions & therefore more chances to win during these hours.
This means that the lion share of indices trading transactions is happening between the London session and US market session. Naturally this is the best time to make profits.
The stock indices prices moves a lot during the New York and London Sessions because Multinational companies, hedge funds, managed funds and banks are open for transacting.
Multinationals will transact indices during this time to facilitate international business transactions and commerce, hedge funds and managed funds will trade indices for investment purposes, banks on the other hand will exchange a lot of money on behalf of their clients, maybe tourists wanting to travel around the globe or just anyone wanting to exchange money so as to buy something in another country or make some transaction.
This makes the stock indices trading market very liquid at this time and the high volume of transactions means that stock indices prices move a lot. At this time the indices charts will generally move in particular direction & form a short term trend.
As a trader you also want to join in when everyone is placing their stock indices orders as this is the time there is enough liquidity and many good opportunities to make money, and because there is a lot of liquidity the stock indices price movement will generally be more predictable unlike when there is little liquidity and the stock indices price movement becomes unpredictable and the indices prices can move in a range bound with no particular direction.
Once you trade indices for a while you will get to know that is easier to make money when the stock indices trading market is moving up or moving down, unlike when it is in a range.
Asian Session Characteristics:
- Least volatile of the 3 sessions
- Account for 15% of daily transaction turnover
- Typical 20 -30 pip moves
European Session Characteristics:
- Most volatile of the three marketmarket sessions
- 35% of daily transaction volume
- Typical 90 -150 pip moves
US Session Characteristics:
- 2nd most volatile of the three marketmarket sessions
- Accounts for 25% of daily turnover
- Focuses on US economic news
US and Europe Session Overlaps Characteristics:
- Combines the 2 most volatile trading sessions
- Accounts for 60% of total daily transaction turnover
- Focuses on USA & European economic news
- Fast moving stock indices prices and stock indices trends in a particular direction
