3.1 Forex market hours: Tokyo, London, New York
Forex is 24h, but it's divided into three major sessions. Each has distinct personality.
π―π΅ Tokyo
00:00 β 09:00 GMT
yen pairs active (JPY). Often range-bound, less volatility than London/NY. Asia session.
π¬π§ London
08:00 β 17:00 GMT
largest volume, highest liquidity. EUR, GBP, CHF pairs move. trends often start here.
πΊπΈ New York
13:00 β 22:00 GMT
overlaps with London (13-17 GMT) = peak volatility. USD pairs active, news reactions.
π why it matters: If you trade EUR/USD, the most movement happens during London + NY overlap. Tokyo session usually quieter, better for range strategies.
β° remember: GMT times shift with daylight savings. always check your broker's server time.
3.2 Peak volatility & best times to trade
π₯ Overlap: London + New York (13:00β17:00 GMT)
Highest liquidity, biggest moves, tightest spreads. Ideal for day traders.
π high volatility sessions
- London open (08:00 GMT) β surge in volume
- NY open (13:00 GMT)
- major news releases (see 3.6)
π low volatility sessions
- late NY / early Tokyo (22:00β02:00 GMT)
- lunch breaks (around 12:00 GMT in London)
- before major holidays
π‘ example: On Tuesday at 13:30 GMT, US news hits. London/NY overlap active β EUR/USD might move 50 pips in minutes. That's where day traders hunt.
3.3 Essential forex trading tools
Professional traders use a combination of charting platforms, news feeds, and analysis tools.
most popular, custom indicators, automated trading.
web-based charting, social ideas, screener.
ForexFactory, Investing.com, MyFxBook.
Reuters, Bloomberg, or broker news.
pip value, risk %, margin.
π οΈ setup example: trader uses TradingView for analysis, places trades via MT5, checks ForexFactory before London open, and uses a risk calculator to set lot size.
3.4 Order types: market, limit, stop
execute immediately at current price (ask for buy, bid for sell). slippage possible.
buy below market or sell above market. guarantees price, not execution.
buy above market or sell below market (triggers market order). used for stops/entries.
π stop-loss example: you buy EUR/USD at 1.1050, place stop-loss at 1.1020 (30 pips below). if price falls, stop becomes market sell order to limit loss.
π limit entry: you want to buy if price drops to 1.1000. set buy limit order at 1.1000.
3.5 How to read basic market movement
Price moves in trends, ranges, and breaks. Three core concepts:
π example: On 5-min chart, if each pullup stays above previous low and breaks previous high β uptrend. many traders follow trend until broken.
π§ candle patterns: long body = strong momentum; wicks = rejection. a series of long green candles signals buying pressure.
3.6 Economic calendar & news impact on forex
News releases create volatility. Economic calendar shows upcoming events with expected vs actual impact.
- Interest rate decisions (central banks)
- Nonβfarm payrolls (NFP) β US jobs
- CPI (inflation) reports
- GDP releases
- PMI, retail sales
If actual > forecast β currency strengthens (if it's positive for currency). example: US CPI higher than expected β USD jumps.
π° NFP example: forecast 200k jobs, actual 300k. USD rallies across the board. Traders who anticipated could be long USD. spreads widen, slippage possible.
β safe approach: beginners should either avoid trading 30min before/after major news, or use very tiny size to learn how markets react.
module 3: knowledge check
1οΈβ£ which session overlaps with London for highest volatility?
New York (13:00β17:00 GMT).
2οΈβ£ order type to buy below current price?
buy limit.
3οΈβ£ what does NFP stand for?
NonβFarm Payrolls (US jobs report).
4οΈβ£ in an uptrend, what pattern do you see?
higher highs + higher lows.
5οΈβ£ which platform is most used for forex?
MetaTrader 4/5, also TradingView.
βοΈ task: check today's economic calendar (forexfactory). find one high-impact event. note the time and expected vs prior.
module 3 completed!
you now understand sessions, volatility, tools, order types, and news. module 4: technical analysis basics.