New York forex trading is among the most liquid forex trading sessions worldwide. There is typically the most liquidity during the US session, which overlaps with the London session of the forex market.
Read on to find out how you can trade these sessions effectively and which are the best currency pairs to trade in this trading session.
What is the New York trading session?
Trading in this active forex session commences at 8:00 New York time and ends at 17:00 New York time. This session overlaps with London from 8:00 AM to noon New York time, when the forex market is highly liquid and active from noon to midnight New York time when New York traders take over from their London counterparts.
Traders in New York that do not overlap with Tokyo typically send their books to their counterparts on the West Coast, to their counterparts in New Zealand cities like Auckland or Wellington, or the Australian city of Sydney. During this period, US Dollars and Canadian Dollars seem to be most actively traded.
If there is an overlap between the US session and the London session, the US session may trade similarly. Usually, the first half of the New York session has more volatility than the second half. To trade varying levels of volatility, traders can use various methods.
How to trade?
It is said that time is money. As a result, timing is crucial in the 24-hour forex market. Successful trading depends on good timing. Certainly, but at what hours should we trade?
During the hot zone, 13.00 GMT to 16.00 GMT is considered the optimum time. How powerful are these hours? During these hours, volume and volatility are at their height! There are many active market participants in this period, currencies are rapidly moving, and the most important economic news is being published.
Volatility refers to the speed at which the price changes for a particular currency pair; volume refers to many lots being sold and bought for one or more currency pairs.
During power hours, volatility and volume combine like gasoline. But in a good way! Additionally, they can cause significant movement in almost all currency pairs.
Best FX pairs to trade in New York Trading Session
It would be best to focus on trading your major forex pairs on New York sessions, such as EUR/USD, USD/JPY, GBP/USD, EUR/JPY, GBP/JPY, and USD/USD/USD CHF. When the US session overlaps with the European session, these pairs will be the most liquid.
Bottom line
Each trading session within the forex market has its characteristics. For example, the London forex trading session comes after the New York session, followed by the Asia trading session.
Due to liquidity, spreads will be reduced, reducing trading costs. As a result, most forex traders are likely to benefit from increased volatility and liquidity during the overlap period in the New York trading session.
