Trading Forex During the New York Session

Just as European traders are returning from their lunch breaks, the U.S. trading session springs to life at 8:00 am EST as traders start arriving at their offices.

Similar to Asia and Europe, the U.S. session revolves around one major financial center that commands the market's attention.

And we're, of course, talking about the "City That Never Sleeps" - New York City, the concrete jungle where dreams come to fruition!

Approximately 17% of all forex transactions occur in New York.

Some traders also refer to the New York session as the "North American" trading session because, aside from New York, other significant financial centers in North America remain active during this time, including Toronto and Chicago.

Below, you'll find a table displaying the pip ranges for major currency pairs during the New York session.

These pip values have been determined by averaging historical data. It's crucial to note that they are NOT FIXED VALUES and can fluctuate based on factors such as liquidity and prevailing market conditions.

The New York Session Divided into Three:

The New York session can be effectively split into three distinct segments:

1. Morning Session: Running from 8:00 am to 12:00 pm EST.

2. Lunch Session (Lunch Hour): Occurring from 12:00 pm to 1:00 pm EST.

3. Afternoon Session: Extending from 1:00 pm to 4:00 pm EST.

The majority of trading activity is concentrated within the morning session. Technically, the New York afternoon session extends until 5:00 pm EST, but trading activity typically tapers off when the U.S. stock market closes at 4:00 pm, making it less advisable to trade beyond that time.

Tips for Trading the New York Session:

Here are some essential tips to keep in mind when trading during the New York session:

1. Morning Liquidity: The morning session enjoys high liquidity, primarily because it overlaps with the European session.

2. Economic Reports: Most economic reports are released early in the New York session. Considering that about 85% of all trades involve the U.S. dollar, significant U.S. economic data releases can have a substantial impact on the markets.

3. Afternoon Calm: As European markets close during the afternoon U.S. session, both liquidity and volatility typically decrease.

4. Friday Afternoons: On Friday afternoons, trading activity tends to be subdued. Asian traders often engage in karaoke, while European traders head to pubs to watch soccer matches. Additionally, there's the possibility of reversals in the latter part of the session, as U.S. traders close their positions ahead of the weekend to limit exposure to weekend news.

Selecting Currency Pairs for Trading:

It's important to note that during the New York session, there is a significant surge in liquidity as both the U.S. and European markets operate simultaneously. This heightened activity involves extensive communication between banks and multinational companies.

This robust environment allows you to trade virtually any currency pair, although it's advisable to stick to major and minor pairs while avoiding more exotic ones.

Furthermore, because the U.S. dollar is on one side of the majority of forex transactions, market participants closely monitor U.S. data releases. Better or worse-than-expected U.S. economic reports can trigger substantial market fluctuations, with the U.S. dollar experiencing significant movements.

If you find yourself bewildered about the timing of various sessions, we've created the next section with you in mind!