Forex trading is available 24 hours a day on weekdays. However, not all hours of the day will have the same amount of market participants and trading volume as others. Some trading sessions such as London, New York and Tokyo offer more liquidity than Sydney and Wellington. What’s more, liquidity is even greater when the major financial markets are overlapping with each other.
New York session definition
The New York session is open for traders to place orders between 12 pm and 8 pm, when the North American markets see the most trading activity.
Why it is important for traders to understand the New York session
- Trading sessions differ in terms of volume and volatility from session to session
- During a short window per day regional sessions overlap, which increases liquidity
- Traders who hold positions overnight can miss out on catalysts
- Timing your trades in Forex is essential in trading. High liquidity can give you the tightest spreads and move the markets more predictably.
The New York session in more detail
The New York trading session, London trading session and Tokyo session are considered as the most active ones. In addition, overlap between the New York and London sessions create the most liquidity in the market. Every trader knows the benefits of good liquidity: tighter spreads, actively moving markets and better trading opportunities. As more traders are trying to trade during the peak trading hours, more liquidity is created during those hours, making this whole process a self fulfilling prophecy.
Traders who can not afford to be in front of their computer screens during the most active hours, can try swing trading. Swing traders have the luxury of spending less time trading actively, instead, they are actively analyzing the markets in their spare time.
New York session example
Traders based in the US and Canada are more likely to trade during the New York session. By the time the unofficial New York session commences, a sizable portion of futures trades have already been executed, the Asian markets have concluded trading and some news from around the world has had time to influence the markets.
Asian and North American markets can overlap at around 7 am ET. When this happens, the North American markets can experience increased volatility.
FAQs on the New York session
What are the forex trading sessions?
Forex trading is divided into three main unofficial sessions – New York, Tokyo and London. These sessions indicate the periods when high liquidity is experienced by the North American, European, and Asian markets. In addition, there is a pacific trading session that includes financial centers of New Zealand and Australia: Wellington and Sydney respectively.
When does the New York session start?
The New York session starts at 12 pm ET and concludes at 8pm ET. By the time the New York session starts, the markets have had the time to digest early news including stocks, bonds and futures performances.