Clint
November 29, 2016, 11:29pm
17
.
This thread is like a re-run of one posted 2½ years ago. In fact, the wording of the questions is eerily similar. I’m not suggesting that you and [B]etycoon[/B] are the same person, but —
— I was a big fan of [I]The Twilight Zone,[/I] back in the day, and weirdness gets my attention.
However, I digress.
Regarding trading sessions in general and the “Sydney session” in particular, you might benefit from reading that older thread HERE .
Regarding the division of each forex trading day into trading sessions, I have adopted a new approach, which you can read about HERE , if you’re interested.
And here’s a portion of another post on this same subject:
A case can be made for dividing the world into [B]three[/B] major, regional forex markets: Tokyo (if we understand that to mean all of Asia plus Australia and New Zealand), London (if we understand that to include all of central Europe plus Ireland and South Africa), and New York (if we understand that to mean all of North America).
Looked at this way, the “Tokyo market” is a 1,099 billion USD per day market; the “London market” is a 2,756 billion USD per day market; and the “New York market” is a 983 billion USD per day market.
Are you shocked that New York comes in last? How can that be, given the fact that the highest trading volume of the day typically occurs in the first 3 hours of the New York session?
The answer lies in overlap. The first 3 hours of the New York session overlap the last 3 hours of the Zurich session and the 6th, 7th and 8th hours of the London session. There is no other time of day when 19 countries, accounting for 75% of total world forex volume, are all “open” at the same time. “Open”, in this context, means that they are in the midst of their 8am-5pm normal business days.
There’s one other factor that argues for dividing the globe into three regional forex markets. The big banks which are the heavy-hitters in the worldwide interbank network typically maintain “trading desks” in at least three major financial centers around the globe. In almost every case, those three centers are London, New York and Tokyo. As the normal business day winds down in one location, each bank’s position and order book is passed from one office to the next. This happens seamlessly, and we never see it or feel it. Kathy Lien has written an article in Investopedia which details some of this — The Foreign Exchange Interbank Market
Trading activity attracts trading activity, and the clustering of powerful banks in specific locations tends to make those locations grow in importance. How else would you explain the fact that London is so important financially, given the fact that the U.K. is not the most powerful economy in the world? It has to do with 400 years of powerful banks wanting to be “right next door” to other powerful banks, in that one-square-mile area of London known as “The City of London”, or simply as “The Square Mile”.
Well, I’ve just about beaten this horse to death. So, it’s time to move on.
Take care.
I hope those references help to put things into perspective for you.
.