In the world of financial markets, a trading session refers to a specific period of time when markets in a particular geographic region are most active.
Since forex operates on a 24-hour cycle, the sessions follow the sun around the globe – markets open in Asia, then Europe, and finally North America before the cycle begins again.
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Table of Contents
The Four Main Global Trading Sessions
There are four major sessions that divide the trading day:
The Sydney Session
The Sydney session takes place in Australia.
It opens the market after the weekend and marks the beginning of the weekly trading cycle. Since it is the first session of the week, activity is usually quieter compared to the other major sessions.
The Tokyo Session
The Tokyo session happens in Japan and also includes other large Asian markets.
This session is especially important for Asian currencies, with the Japanese yen (JPY) being the most active. Traders often watch this time to see how Asian markets set the tone for the day.
The London Session
The London session is based in the United Kingdom and is the busiest of all four sessions.
It sees the largest trading volume and the highest liquidity, making it the center of global forex activity. Because of this, a lot of price movements and trading opportunities occur during these hours.
The New York Session
The New York session runs in the United States and is the second busiest trading session after London.
It is known for strong volatility, especially during the time when it overlaps with the London session. Many important U.S. economic announcements are also released during this period, which can cause major market moves.
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The Most Important Sessions to Watch
While each session brings opportunities, the overlap periods are where the most action happens.
During overlaps, more traders are active, which increases liquidity, reduces spreads, and fuels stronger movements in price.
London and New York Overlap
This is the prime time for traders everywhere.
With both European and North American markets open, trading volume reaches its peak. Combine this with frequent economic data releases from both regions, and you get fast-moving, highly liquid conditions. If you can only trade a few hours a day, this overlap is often the best choice.
Tokyo and London Overlap
This overlap isn’t as intense as London/New York but is still meaningful.
It bridges the Asian and European sessions, often leading to fresh volatility as traders shift focus from yen-related pairs to European currencies like the GBP and EUR. Pairs such as GBP/JPY or EUR/JPY can be particularly active at this time.
As a new trader, you don’t need to stay awake 24/7 monitoring the markets. Instead, focus your attention on the times of highest liquidity and volatility, particularly the overlap periods.
By concentrating on these sessions, you not only conserve time and energy but also increase your chances of finding profitable opportunities in the market.
Remember, trading is not about being present all the time – it’s about being present at the right time.
This article is for informational purposes only and should not be considered financial advice. Investing in stocks, cryptocurrencies, or other assets involves risks, including the potential loss of principal. Always conduct your own research or consult a qualified financial advisor before making investment decisions. The author and publisher are not responsible for any financial losses incurred from actions based on this article. While efforts have been made to ensure accuracy, economic data and market conditions can change rapidly. The author and publisher do not guarantee the completeness or accuracy of the information and are not liable for any errors or omissions. Always verify data with primary sources before making decisions.