Trading Sessions

Trading sessions are the periods during which the forex market is active across various global financial hubs, operating nearly 24 hours a day due to time zone differences between countries. The primary sessions are distributed across four major time zones: Sydney, Tokyo, London, and New York.

The daily cycle typically begins with the Sydney session, followed by Tokyo (representing the Asian session), then London (representing the European session and the largest by trading volume), and finally New York (representing the North American session).

The highest levels of liquidity and volatility typically occur during session overlaps, most notably the London and New York overlap, where a large number of market participants from both regions operate simultaneously, driving up trading volume and price movement.

The nature of price action varies across sessions; certain pairs may be more active during the Asian session, such as Japanese yen crosses, while euro and British pound pairs tend to see greater activity during the European and US sessions.

A common mistake is trading specific pairs during sessions with low liquidity for those currencies, which can lead to wider spreads, difficulty executing orders at favorable prices, or exposure to sudden, erratic swings caused by fewer market participants.