The financial market is global in nature, which means that people are able to Trade at all times. At the same time, there is a close relationship between the performance of various financial assets such as stocks, commodities and currencies and the time of trading in them.
In fact, there is specific time periods The day when day traders can take advantage of high volatility and trading volume to maximize their efforts. These include overlaps, excluding the first hour and the last hour.
Do not know what they are? In this article, we will look at the concept of overlapping sessions and why they are so important in the market.
What is session overlap?
a Session interference he is a period When two market sessions intersect each other. In the true sense! It is a period when the Asian session intersects with the European session. It is also the period when the European and American markets intersect.
These sessions are important because It has a larger size And more fluctuations than regular sessions. The chart below shows the different session overlaps in the market.
Asian session
The Asian session usually The first one to open As countries in the region are usually many hours ahead of those in the US and Europe. While there are many markets open during the session, the most important ones are in TokyoAnd the ShanghaiAnd the SydneyAnd the Hong Kong.
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In most cases, the Asian session Tends to reverse the performance of the American session. As a result, when the Dow Jones, Nasdaq 100, and S&P 500 index rise, so do their Asian counterparts such as Nikkei and Hang Seng.
Asian session tends to be Relatively bleak, with no significant activity. Volatility across assets such as currencies and cryptocurrencies is usually lowest during this time.
The Asian session starts at 10:00 PM GMT and ends at 08:00 AM GMT.
European session
The European session refers to the period When the markets in Europe are live. The main European markets in LondonAnd the FrankfurtAnd the ParisAnd the Milan. It usually starts at 07:00 GMT and closes at 4 PM. This session tends to be volatile due to the role that Europe plays in the economy.
for example, London is the most important market in the commodity industry. In addition, the European session is usually when major news is announced. This includes economic data and earnings for US companies.
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American session
The American session is the most active in the financial market. In most cases, the average daily volume of US stocks traded is hundreds of billions of dollars.
The session is also popular because of news volume that come from the United States. The American session begins at 08:00 ET and ends at 1600 ET. US markets also have pre-market sessions and extended sessions.
Top assets to trade during overlaps
The FAQ is posed to Best assets to trade during periods of overlap. Are there certain assets that show more volatility and volume, and therefore present more opportunities for day traders, or not?
Well… there are clearly differences.
coins
Or not, Coins are some of the best Assets that experience significant volatility during periods of overlap.
For example, the Asian and European overlap is important because the volume and volatility in the Asian session are usually very low. As a result, there is a significant increase in volume when this session intersects with the European session.
The most common major currencies that show volatility during these overlaps are USD/JPY, GBP/USD and USD/CHF.
Stores
secondly, Stocks are important Assets to trade during overlaps. In most casesAnd the Traders can’t access stocks in Asian markets As it is not offered by most brokers.
Therefore, in-session stock trading overlapping the Asian and European sessions is common. The same is true when stock trading overlaps during the European and American sessions.
stock in Especially good To trade during the overlap period Because most symbols show greater volatility When opened and within the last hour. In the case of European stocks tend to show more volatility during the overlap as traders react to the price action in the US.
Indications
Indications They are another asset to trade through overlaps. Indices such as the Dow Jones, Nasdaq 100, and S&P 500 are made up of a group of stocks. Therefore, they usually It has significant price movements during these periods.
How to trade the overlap session
Another common question is about How should you trade during Cycle periods overlap. In short, what strategies allow for better performance.
In most cases, there is no formula to trade during these periods. What a trader needs is to be prepared and know that sessions will be accompanied by volatility.
As such, the trader must stick to his or her trading plan. Some of the top tips to use when trading staggered sessions are:
- Always Know when the period is overlap start.
- when stop loss for all trades you execute.
- always have Profit taking for all your trades.
- Scalping It can be a useful trading strategy during overlapping sessions.
Summary
In this article, we took a look at what session nests are, how they work, and why they are important. Also, we have explained the three important sessions of the financial market and some important tips for trading during these periods.
If you have little time to trade, or want to get the most out of your analysis, we recommend that you try to trade during the intersections between two large areas.