Trading sessions in the forex market: London, New York, Tokyo & Sydney

The forex market is active around the clock, and for 5 days a week at that. And yet, there are trading session with distinct characteristics. However, the market momentum, the state of liquidity, and volatility vary based on the timing. There are four primary trade timings in the forex market, and each one of them has been discussed here.

Each of the sessions works well based on the region they belong to, the type of profits they are expecting, and the type of trading they perform. Here are the four forex sessions and all that you must know about them.

NOTE: Forex investments involve significant risk. Do not take the views mentioned here as financial advice. Please conduct thorough research before making any investment.

The 4 forex trading sessions, explored

The London session of forex trading

It is the most active forex trading time, operating between 8 AM GMT and 5 PM GMT. This session sees the highest liquidity and the tightest spreads. The most commonly traded pairs for this session are those that involve the USA’s dollar and the UK pound. The London session works best for day traders and those who trade based on trends.

The New York session of forex trading

The New York forex trading session operates from 1 PM GMT to 10 PM GMT. Traders notice high volatility in this session. Also, this session has a heavy influx of economic data from the USA. The most common currency pairs here are the euro and the pound. The New York session works best for new traders and momentum traders.

Sydney session of forex trading

The Sydney session opens forex trading and operates between 10 PM GMT and 7 AM GMT. It does have low liquidity in comparison to others, but it sets the tone for the Asian market activity. Apart from the low liquidity, there is also low volatility, and wider spreads on most pairs and limited directional moves. The most active pairs for this trading session are the Australian, New Zealand, and the USA dollar. The Sydney session is best suited for long-term position holders.

Tokyo trading session for forex trading

The Asian market is the primary focus for the Tokyo session. It operates between 12 AM GMT and 9 AM GMT, and is largely driven by Japanese banks and institutional players. They have moderate levels of volatility, a frequent consolidation phase, and are less aggressive than the western sessions. The most active pairs for the Tokyo session are the Japanese yen and USA dollar. The Tokyo session is best suited for technical traders.

Edited by Abu Amjad Khan