Should I Trade at Sydney, Tokyo, London, or New York Session?

Many people beginning their forex trading journey often wonder what is the best time/session to trade.

In Forex, we have three major market openings or trading sessions: Tokyo (11 PM — 9 AM GMT), London (8 AM — 6 PM GMT), and NY (1 PM — 11 PM GMT). There are also sessions like Frankfurt, Sydney, Toronto, Zurich, etc.

I have come across traders who passionately favor specific sessions, like Tokyo, swearing for its unique advantages, and that’s okay. Personally, I have tested all my trade performance across all the sessions.

What trading sessions do most trades get executed?

From this data, you can see that 70% of trades happen during the New York session (North America session), especially the U.S./London overlap. Here are three reasons many think trading during this time is best.

1. More Liquidity: The U.S., being the largest economy, ensures ample market participants during the overlap, translating to increased liquidity.
2. More Volatility: The U.S./London overlap is marked by heightened volatility, attributed to high-impact news releases and a significant number of traders speculating.
3. Big News Releases: The U.S. market’s economic prominence plus a surge in high-impact news releases during this session provide abundant trading opportunities.

As a trader, liquidity + volatility + high-impact news should be your best friend. However, understand that these have the potential to amplify your losses. Every time you take a position, practice caution to set up yourself for success and be profitable. That involves:

• Having a Trading Plan: A well-defined strategy guides your actions and decisions.
• Exercising Risk Management: Knowing your risk tolerance plus setting stop-loss orders to protect your capital.
• Being Patience and Discipline: Avoid impulsive decisions by staying patient and disciplined in your approach.

Even though trading during the New York session makes the most sense (offering more and better trading opportunities), there are exceptions.

1. Scalpers’ Freedom: Scalpers can take positions whenever their setup forms, irrespective of session times.
2. News-Driven Trades: News releases can affect the market at any time, allowing traders to act promptly after the awaited news is released.
3. Overlaps: Sydney/Tokyo, London/Tokyo, and U.S./London overlaps create bustling trading environments with increased liquidity and movement.

When should you trade?

As a trader, the best response I can give is to do what works for you. Don’t just follow the masses, as there is no such thing as the best time/session to trade.

Just because so many people trade the New York sessions (US/London overlap) doesn’t mean you should also do the same. Get a solid plan that aligns with your preference. And if you are just beginning, experiment with different sessions and overlaps to determine your trading sweet spot. Remember, it’s not about following the masses; it’s about finding what resonates with your unique trading style.