The foreign exchange market operates 24 hours a day, five days a week, thanks to the seamless handover between the major financial hubs around the world. These are divided into four key forex trading sessions, each named after a major global financial centre. Understanding these sessions is essential for traders who want to optimise their strategy around market volatility, liquidity, and economic news releases.

This article covers the 4 major forex trading sessions, their unique characteristics, the best currency pairs to trade during each, and how to plan your strategy accordingly.

Key Takeaways

• The forex market is split into four sessions: Sydney, Tokyo, London, and New York.
• Each session overlaps with another, creating periods of higher liquidity and volatility.
• Traders should align their strategy with session-specific characteristics and currency behaviour.
• News events often coincide with the opening hours of sessions, increasing market movement.
• Selecting optimal sessions can enhance trade timing and risk management.

The 4 Forex Trading Sessions Explained

Sydney Session (22:00 – 07:00 GMT)

The Sydney session opens the global trading week and represents the start of the forex trading day. It’s the quietest session, with lower liquidity and smaller price movements.

Key Features

• Thin liquidity, especially during the first few hours.
• Best time to trade AUD and NZD pairs.
• Volatility increases when Sydney overlaps with Tokyo.

Ideal Currency Pairs

• AUD/USD
• NZD/USD
• AUD/JPY

Tokyo Session (00:00 – 09:00 GMT)

Also known as the Asian session, Tokyo becomes the dominant market after Sydney. Japan is a major player in the global forex market, with the yen heavily traded.

Key Features

• Increased liquidity in JPY-related pairs.
• Significant movements in Asian stock indices can affect currency values.
• Can set the tone for the day.

Ideal Currency Pairs

• USD/JPY
• EUR/JPY
• AUD/JPY

London Session (08:00 – 17:00 GMT)

The London session is the most liquid and volatile trading session due to the concentration of global banks and financial institutions operating in the UK and Europe.

Key Features

• Accounts for a significant portion of daily forex volume.
• High volatility, especially in EUR and GBP pairs.
• Overlaps with both the Tokyo (1 hour) and New York (4 hours) sessions.

Ideal Currency Pairs

• EUR/USD
• GBP/USD
• EUR/GBP

New York Session (13:00 – 22:00 GMT)

The New York session sees the second-largest trading volume. When it overlaps with London, traders witness the highest volatility and trading opportunities.

Key Features

• High impact from US economic data releases.
• Strong price movements in USD pairs.
• Liquidity drops toward session close.

Ideal Currency Pairs

• USD/JPY
• EUR/USD
• GBP/USD

Best Time to Trade: Overlapping Sessions

The most active periods occur when two sessions overlap:

• London/Tokyo Overlap (08:00 – 09:00 GMT): Moderate activity; limited but relevant.
• London/New York Overlap (13:00 – 17:00 GMT): Most volatile, ideal for major pair trading.

Fundamental vs Technical Analysis

Feature	Fundamental Analysis	Technical Analysis
Focus	Economic indicators, news events, interest rates	Price charts, patterns, indicators
Time Frame	Long-term investment outlooks	Short to medium-term trade timing
Strength	Explains why the market moves	Helps identify when and where to enter or exit
Best Suited For	Position and swing traders	Day and scalping traders

Many traders blend both approaches to gain a holistic view. For instance, a trader may use fundamental analysis to assess the impact of a US interest rate decision and technical analysis to find the optimal entry point during the New York session.

Case Study: Optimising Trades with Session Awareness

During the Traders MBA Forex Course, one participant backtested a scalping strategy on EUR/USD. He noticed trades placed during the London/New York overlap had a 30% higher success rate compared to trades made during the Sydney session. By aligning his trading hours with high liquidity sessions, he reduced slippage and maximised profit potential.

This strategy adjustment not only improved performance but also helped refine risk management through better entry timing. The session-based approach remains a key element in all our Forex Course mentoring programmes: Forex Course

Frequently Asked Questions

What are the four forex trading sessions?

The four sessions are Sydney, Tokyo, London, and New York. They cover the 24-hour global trading day in shifts.

Which forex session is best for trading?

The London/New York overlap is considered the best for trading due to high liquidity and volatility.

When does the forex market open and close?

The forex market opens at 22:00 GMT on Sunday with the Sydney session and closes at 22:00 GMT on Friday with the New York session.

Is it bad to trade during the Sydney session?

Not necessarily. It’s quieter, making it suitable for low-volatility strategies, especially for AUD and NZD pairs.

How do overlapping sessions affect forex trading?

Overlapping sessions create higher liquidity and volatility, offering better trading opportunities, especially for major pairs.