Market Sessions Strategy for Binary Options
80
46
votes
5
reviews
Strategy
Score distribution:
  1. Positive: 42 out of 46
  2. Negative: 3 out of 46

Your Vote

Market Sessions Explained
Do Market Sessions actually matter? The answer is a definite yes. They matter a lot. The right time to trade will have a huge effect on your trading profitability. There is a lot of essential information needed before you can start trading forex pairs, whether it be through the spot market or Binary Options. The problem that most new traders make is that they tend to skip the basic information and head straight into which strategies they can use to make profits. You are probably thinking why are market sessions so important if the markets are open 24 hours a day? While you are 100% correct, it is important to know that the market activity varies tremendously throughout the different sessions of the day. The best time to trade will depend on which trading strategy you use. This article will help you to determine in which sessions your trading plan will work the best.

What Exactly Are Market Sessions

Before we decide which time slots will best suit the different strategies, we must first look at what a day in the forex market looks like. The forex market can be divided into four major trading sessions, namely: the Sydney session, the Asian session, the London session and the New York session. The market session in play will directly affect the volatility and liquidity of different foreign currencies.

The EUR/USD and GBP/USD, for instance, is most volatile and liquid during the London and New York sessions, particularly when the overlap of these two sessions occurs. Whereas the AUDUSD will be more active during the Sydney and New York sessions.

The EUR/USD and GBP/USD, for instance, is most volatile and liquid during the London and New York sessions, particularly when the overlap of these two sessions occurs. Whereas the AUDUSD will be more active during the Sydney and New York sessions. 

How Market Sessions Are Calculated

The forex market opens on Sunday 22:00 GMT and runs right through without closing until Friday 22:00 GMT. Now that you know what the major market sessions are, let’s take a closer look at their open and closing times:
  • New York opens at 8:00 am to 5:00 pm EST (EDT)
  • Tokyo opens at 7:00 pm to 4:00 am EST (EDT)
  • Sydney opens at 5:00 pm to 2:00 am EST (EDT)
  • London opens at 3:00 am to 12:00 noon EST (EDT)
As you can see in the different market times above, there is a period where both sessions are open at the same time. This is referred to by traders as the “overlapping time”. The sessions overlap during the following hours:
  • New York and London overlap from 8:00 am — 12:00 noon EST (EDT)
  • London and Tokyo overlap from 3:00 am — 4:00 am EST (EDT)
  • Sydney and Tokyo overlap from 7:00 pm — 2:00 am EST (EDT)
It is crucial to remember that the above mentioned times vary during the months of October and April. This is because some countries shift to/from daylight savings time (DST).

How Can I Apply This To My Trading

A quick pop quiz! During which times are TV ratings the most noteworthy? In the event that you said during prime time, then you would be right! What does this need to do with market sessions? Well, much the same as TV ratings, liquidity are at their highest when there are more individuals taking part in the markets. It makes perfect sense because, during this overlap, all the market participants are buying and selling, which means that more cash is exchanging hands.

Metatrader indicator for Market Sessions

As always, MetaBinaryOptions is offering you a free Metatrader indicator for helping you apply this strategy.

Click here to download the indicator 100% free

This indicator will automatically plot the four major Market Sessions on your chart to let you know in which trading session you currently are.

market-session-forex-factory

Figure 1 – Market Sessions indicator

Ok, so now that you know what the different market sessions are and what they mean, you can use them to determine what strategies to exercise and more importantly when. For instance, if you are trading a range trading strategy or prefer smaller moves in the market, you should avoid the market overlaps at all costs.

market-sessions-metatrader

Figure 2 – Market Sessions trading example

Now let's say that you are a breakout trader or you like trading with the trend you should definitely be trading during the session/overlap that is correlated to your trading pair. Take the above EUR/USD chart for an example. This pair is usually very active during the London and New York trading sessions. We had a lovely breakout above the resistance level where our first arrow is. This increased liquidity happened during the London and New York session overlap. This is indicated at the bottom of the screen on our indicator. The next day during the same session overlap there was a nice downtrend that formed. We could have easily taken a short trade when the market made a pullback and formed a beautiful pinbar at our second arrow.

Market Sessions Summary

There is no possible way on earth that you could trade each and every hour of the forex market unless you are some kind of superhuman. Remember that you need your sleep to live a healthy lifestyle and to recharge your batteries if you want to become that hotshot trader that everybody aims for. Knowing when the best times are for you to trade will save you a pound of money in the long run. Let me leave you with something to ponder about – Less is more and more is less.
Market Sessions User Reviews
Your Reviews