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Why you should only be Trading One Session

three clocks on a white background next to each other showing the different times in London, New York and Tokyo


The Global Market operates 24 hours per day, however, that doesn’t mean you should be trading throughout those 24 hours. In this post, we’ll explore the various trading sessions and consider the best times for trading in Forex.

There are three main trading sessions – Tokyo, London & New York (Also known as Asian, European & North American), each one overlapping slightly. By understanding the different sessions and their unique characteristics, you can identify which one will work best for you.

Asian Session (Tokyo)

The Tokyo Session runs from 11pm to 8am GMT and although Tokyo is the major market, it also includes China, Australia, New Zealand and Russia. The Tokyo Session is known for lower volatility and liquidity, with movements in general being smaller than what is seen in the London or New York Sessions. There are usually clear entry and exit points and this combined with the smaller movements, allows traders to manage their trades with thorough analysis, allowing for better risk management.

As the Tokyo Session ends it overlaps with the London Session, where more liquidity instantly becomes available and you can often see breakout opportunities after the close.

European Session (London)

The London Session runs from 7am to 4pm GMT and is the most active of the three sessions. As the middle session, Asian and North American traders are usually active during the London session, so it usually provides the most trading opportunities.

When you look at the average pip movement of the major currency pairs, London usually shows the most movement. The London Session is fast paced and known for heightened liquidity and volatility. The high volume of buying and selling means that major currency pairs can trade at low spreads.

The London Session creates good opportunities for traders, however, it’s important to have a good risk management strategy as the market can be volatile.

North American Session (New York)

The New York Session runs from 12pm to 8pm GMT, which starts around halfway through the London Session. During this overlap, there is high liquidity and news in the United States has a strong influence over prices, due to the US Economy’s high influence over the world and the Dollars importance in Forex trading. Once the London Session closes, liquidity and volatility start to decrease.

Why shouldn’t I Trade all Sessions?

You may be thinking that as the market is open 24 hours per day, so you should be trading all day. But, if you want to see more consistent results in your trading, you should only be trading one session. Having a simple strategy that trades only one session means you will know what to look for and when.

Depending on which instrument you are trading, there are peak hours that you should be entering trades in. Each session has different market dynamics and it’s important to concentrate on one session to learn the timing routine and the liquidity patterns that tend to happen around each session.

Which Session should I trade?

The best time to trade is considered to be when the sessions overlap. Assets can be traded with increased volatility and liquidity, leading to more trading opportunities. The London/New York overlap has the highest volume of trades and creates the most opportunities.

When choosing a session, various factors need to be considered, including your availability, time zone, trading style and the currency pairs you are trading.

  • Choose a session that suits you, so that you are available to monitor movements in the market.
  • Consider your time zone, a lack of sleep can affect your decision-making.
  • Think about what volatility works best for your trading style. Scalpers will prefer the high volatility of the overlap between the London and New York Sessions, whereas if you want to target a few pips in a low volatile market, then the Asian Session would suit you better.
  • The Pairs that you want to trade will also affect your decision on which session time to choose. You will want to choose a Session where your preferred pairs are most active. For example, the best time to trade USDJPY, AUDJPY, NZDUSD or EURAUD is the Tokyo Session. GBPUSD, EURCHF, USDCHF, GBPJPY are best to trade in the London Session and EURUSD, USDCAD, XAUUSD, EURCAD are best to trade in the New York Session.

So, by learning which session will suit you best and sticking to that one session, you will over time develop a deeper understanding of its characteristics and the trading opportunities it offers. This will significantly enhance your strategic approach and have a positive impact on your trading success. Always remember to approach trades with the right risk management in place and stay informed about global economic events.

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