What a trading session is

Always open, never everywhere 

Two facts sit awkwardly together, and this whole module is built in the space between them. The first is that spot foreign exchange is quoted continuously through the working week. The second is that every institution which makes that possible is staffed by people working ordinary hours in an ordinary city. Nobody is at a dealing desk in Zurich in the middle of the night, and yet the market does not stop.

The two reconcile once the market is understood as a network rather than a place. A stock exchange is a single venue with an address, a matching engine and a timetable, and when its timetable ends there is nowhere left to send an order. Foreign exchange is a decentralised network of banks, brokers, funds and corporate treasuries quoting prices to one another over dealing systems, and there is no central address to lock. When the desks in one city go home, desks several time zones to the west are switching their screens on and taking the quoting over. The price is handed across the planet rather than paused.

So what circles the world is not one continuous crowd. It is a sequence of local working days that meet at their edges, and the shape of the trading day is the shape of that sequence.

What a session actually is 

A trading session is a window of hours named after the financial centre whose participants are at work during it. Nothing opens at the start of a session and nothing closes at the end of one. No bell rings, no auction is held, and no currency pair becomes unavailable. What changes is who is present: which banks are quoting, which corporate and institutional flows are being executed, which national data is released, and therefore how many firms are willing to show a price in size at any given moment.

This is why session boundaries are conventions rather than facts. A centre's session is usually described as running from its local morning to its local evening, because that is when its institutions are staffed, and two data providers can draw the lines in slightly different places without either being wrong. An exchange's hours are published by the exchange and are true by definition. A session's hours are a description of collective behaviour, and descriptions differ.

Why the day has a shape at all 

Behind the naming convention sits something measurable: the number of participants prepared to quote a two sided price, and the size they are prepared to quote in. When the banks of a major centre are staffed, several institutions are competing to quote the same pair at the same instant. Their quotes sit close together, and an order of ordinary size is filled without moving the price far. When those desks are empty, fewer firms are quoting, the remaining quotes sit further apart, and the same order meets a thinner book.

That single mechanism accounts for most of what the following lessons describe. Cost, which the costs module treated as spread plus commission, is not a constant through the day, because the spread component is a function of how many participants are quoting and the quoting population changes on a schedule. Execution, which the market structure module treated as a matching process, meets a different depth at different hours. Sessions are not a technique and they are not a strategy. They are the working timetable of the institutions on the other side of the market.

The week has edges even when the day does not 

Continuous is not the same as permanent. The rotation of centres runs out at the end of the working week. When the New York desks close on Friday evening there is no centre a few hours further west about to open, and quoting stops until the Asia Pacific centres begin the following week. For that stretch there is no price at all. Positions cannot be opened or closed, resting orders are not executed, and the first price of the new week is produced by whatever the market has concluded in the meantime rather than by an unbroken sequence of trades.

Instruments whose underlying really does have a bell 

Not every CFD inherits the currency market's timetable, and the reason is the underlying. A contract reads the price of the market it is written on, so it can only be quoted while that market is producing a price. Where the underlying is a decentralised network, the contract can be quoted for as long as the network is quoting. Where the underlying is listed on an exchange, the contract is bounded by that exchange's hours, and an exchange genuinely does have an opening auction, a closing auction and a timetable published by the venue rather than set by any broker.

• Index CFDs track a benchmark calculated from the prices of its constituent shares, and the benchmark has no meaningful value while those shares are not trading. Contracts written on index futures instead follow the futures venue, whose session is longer than the cash market's but is still bounded and still broken.
• Shares CFDs are bounded by the listing exchange and by that exchange's holiday calendar. A share listed in one country stops quoting on that country's public holidays whatever the rest of the world is doing.
• ETF CFDs follow the exchange the fund is listed on, which is not necessarily where the fund's holdings trade. The listed price and the underlying holdings can therefore run on two different timetables.
• Commodity and metal contracts follow the futures venue beneath them, which conventionally runs a long session with a short daily break rather than one unbroken stretch.

The practical consequence is that one account can hold positions in instruments with entirely different timetables, and the fact that one of them is quoting says nothing about whether another is.

Reading the hours from the specification 

Trading hours are not a general fact about a market. They are a per instrument term, published by the broker in that instrument's contract specification alongside its contract size, its minimum order size and the daily cut off at which financing is applied. The specification is where hours are read from rather than inferred, because it states the hours that particular firm quotes that particular instrument, which is not necessarily the whole of the underlying venue's session. YAL publishes contract specifications inside MetaTrader 5.

Two details in a specification cause more confusion than the hours themselves. The first is the clock. Hours are usually stated in the platform's server time, which is chosen by the broker and is frequently a European zone rather than the reader's own. The second is daylight saving. Several major centres move their clocks twice a year and the Gulf states do not, so the offset between a server clock and a local clock is not a constant, and hours that fall at one local time for part of the year fall an hour earlier or later for the rest of it. The correction is arithmetic, and it is done once per instrument rather than assumed.

Where practitioners disagree 

Two arguments run underneath everything that follows, and a reader will meet both. The first is where a session begins and ends. One convention anchors each session to the local business day of its centre. Another anchors it to the hours of the dominant exchange in that centre. A third abandons named hours altogether and derives the boundaries from measured quoting activity, which produces edges that move with the season. The three do not agree, and a chart that shades sessions is shading somebody's convention rather than a fact about the market.

The second is how much any of it still matters. One tradition treats session structure as a first order property of a market, on the grounds that the participants present determine the depth available. Another argues that continuous electronic quoting and automated participation around the clock have flattened much of the difference the convention was built to describe, and that the named sessions now describe the market of the past more accurately than the market of the present. Both positions are held by people reading the same data, which is why the disagreement persists rather than resolving. What is not in dispute is the mechanism underneath: a market is quoted by the institutions that are awake, and their working hours are a matter of geography.