Lesson 2: FOREX - Getting Started Part 2

Who participates in the Forex market?

The people who take part in the Forex market are split up into 4 groups:

• Governments and Central Banks – these include the Federal Reserve, the Bank of England and the European Central Bank.
• Commercial Banks- such as Citigroup, Barclays Capital and UBS.
• Large international companies – you've probably heard of some of them.
• Individuals – like you and me. This group is very important and we'll get back to them at a later stage.

Now that we've covered the What, the Why and the Who, let’s take a look at the When.

When can we trade in Forex Market?

The Forex market is open 24 hours a day, 5 days a week.

It can be broken up into 3 different trading sessions: The Asian, the European and the U.S Trading session.

Each trading session has a start and finish time and as you can see there is usually a period of time where 2 of them overlap one another.

• The Asian session is also referred to as the Tokyo session and is considered the center for news coming from Australia, New Zealand, Japan and China.
• Japan also happens to be the 3rd largest trading center in the world and the pairs that usually to move during this session include currencies such as the Japanese yen, the Australian Dollar and the New Zealand Dollar.
• The next one, the European, is the most popular. News from all over Europe comes out during this session and on average around 30% of all Forex transactions happen during this time.

Since the European session lies between the Asian and the U.S session, it is where the majority of traders come alive and trading volatility starts to increase.

Pairs that move during this time normally include currencies such as the Euro, the Pound, the Yen and the Swiss Franc.

As the U.S and European sessions overlap one another, it’s considered to be the most volatile time to trade as traders from Europe and the United States are both trading simultaneously.

Pairs that tend to be extra volatile during this time include currencies such as the Pound, the Euro, the Dollar and the Yen.