The trading session means the daytime primary trading hours for the locale. In this world we have many different trading sessions depends on the market and location that we discuss.
In other words, it is the trader favorite time to trade within the financial market, starting from the opening bell to the closing bell of the market.
All of the assets (stocks, forex, futures, and bonds) have a different trading sessions since they have different characteristics. Besides, each of that asset also has different primary trading hours depending on the time zones.
How does it Work?
The hours of trading sessions vary based on the country and asset class. For instance, the trading session for the stock market in the U.S. begins at 9.30 a.m. and ends at 4 p.m. Eastern Time (ET). But, the regular trading season for the bond market in the U.S. starts at 8 a.m. and ends at 5 p.m. ET.
For the future markets, the trading hours depend on the type of commodity traded and also the exchange. Being aware of this session is essential for investors to avoid unexpected problems to appear.
Additionally, some markets also have a pre-market or after-hours trading session. While the trading sessions for some other markets are 24-hour.
Pre Market and After Hours Trading Session
Aside from the regular trading sessions, we also have pre-market and after-hours sessions. These sessions usually help traders to gain profit from the important news announcements or other factors that happen outside the regular trading sessions.
Yet, trading during this session can be risky. One, traders cannot even see the quotes on their trading system during that session. Two, this session also lack liquidity due to the small number of participant in the market.
Three, there might be greater price fluctuation during this session due to the breaking news. Four, the asset price during this session can be different from the ones traded in the regular session.
Lastly, there is less technical support available during this session, thus you may face trade execution delays.