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The start of the New York trading session is the best 4-hour window in the forex market. During this period, you’ll experience the most volatile and liquid market on the forex day.
This session accounts for 17% of daily forex transactions. That’s mainly because many day traders open positions to capitalize on market movement.
The New York trading session is among the peak trading hours in the forex market. This session opens at 8:00 AM and will last until 5:00 PM EST (12 MN - 9 AM UTC)
In this period, the market experiences diverse movement trends because of increased volatility and high liquidity.
The first four hours of this session are the best time to enter the market as they overlap with the London trading session.
These two—the New York and London sessions—are the two most heavily traded sessions!
But that doesn’t mean the market is equally active throughout the session.
Most of the market actions happen during the morning session, or when the London session crosses with the New York session.
So, this period is the best bet if you want your position to make the most out of the market movement.
However, liquidity often dries up in the afternoon. This is because traders start to lock in their profit during this session.
Aside from overlapping sessions, there is another reason why the New York session garners a high volume of trading activities. That’s because two of the largest financial centers globally operate during this period.
Here are the two financial centers that operate during this session:
When these financial centers are open, they will attract a large number of financial market participants. When combined with the influx of online traders, the market will be saturated with huge amounts of forex transactions.
The New York trading session has a direct and significant impact on the forex market. This trading session has market quirks that you can maximize to gain profits and mitigate your position’s risks.
Here are what you can expect when the market enters the New York session:
The United States has the strongest and most stable economy in the world. Additionally, New York City ranks first in the Global Financial Centres Index and is the world’s wealthiest city.
With that, forex traders see its currency as a safe haven.
You can imagine that this session will have diverse market participants, which will drive up the volatility and liquidity of the market.
But how would high volatility and liquidity help you? Well, you’ll be up for diverse, profitable opportunities and a tight spread.
Remember, your position is subject to high returns if you execute it properly during a period with increased volatility.
When the market enters the New York session, you can expect a spike in the trading volume of the major currency pairs.
Remember, your best bet when you’re trading is to trade the majors.
Why? Well, we all know that major currency pairs have USD in them; and the USD is the main currency that’s being traded during this session.
And when a currency is being heavily traded during a particular session, you can expect it to move rapidly. This is where you can get high returns.
Every Friday, the forex market experiences a significant reversal during the latter period of the New York session.
That is because traders try to avoid holding their positions open over the weekend.
We know the forex is closed during the weekend, so you won’t be able to enter the market. If your position will be exposed to different risks if it runs over the weekend.
But this is not always a bad thing. If you’re a day trader, you can capitalize on this reversal to open a position and exit in a short period of time.
Just remember, always close your trade when the Friday New York session ends.
The possibilities you’ll experience during the New York trading session multiply when you trade its overlapping sessions. The moment it overlaps with London and Sydney sessions, the forex market experiences a further increase in its volatility and liquidity.
The London and New York overlapping sessions are a paradise for day traders. But of course, only if you can trade in a volatile market (Pro tip: Have sound entry and exit strategies!).
This overlap provides the best 4-hour window in the forex market, which happens from 1 PM to 5 PM UTC.
During this period, you can expect rapid price movements. If you can ride the market flow, your position will be up for profitable opportunities.
In this session, you can trade all majors and minors with the EUR, GBP, and CHF.
The New York and Sydney sessions are the last overlapping major sessions on the forex day. They last for two hours, from 08:00 PM to 10:00 PM UTC.
This trading session might not bring that much trading volume. But still, you can expect volatility here- well, it's still a New York session!
What you can do here is to execute a quick trade using these pairs:
Okay. You’ve learned the main forex sessions, which are in New York, London, and Tokyo. Remember, trading these sessions can bring you diverse market movements and profitable opportunities.
In the next lesson, you’ll learn how to trade the forex clock effectively.