A forex trading session refers to a specific period during the 24-hour forex trading day when trading activity is most concentrated in a particular global financial centre. The market is divided into four main sessions: Sydney, Tokyo, London, and New York. Each session brings different levels of liquidity and volatility, depending on the time zone and the currency pairs being traded.

Understanding these sessions is crucial for traders to maximise profitability, align strategies with market conditions, and avoid periods of low liquidity.

Key Takeaways

• The forex market operates 24 hours a day, 5 days a week, across four main sessions.
• The London and New York sessions are the most active and volatile.
• Session overlaps offer the highest liquidity and trading opportunities.
• Currency pairs are most volatile during their respective session hours.
• Timing your strategy to session characteristics improves execution and outcomes.

Overview of the Four Forex Trading Sessions

Session	GMT Time	Major Currencies	Session Traits
Sydney	10:00 PM – 7:00 AM	AUD, NZD	Starts the trading week, lower volatility
Tokyo (Asia)	12:00 AM – 9:00 AM	JPY, AUD	Steady movements, news-sensitive
London (Europe)	8:00 AM – 5:00 PM	GBP, EUR, CHF	High volume, sharp price moves
New York (US)	1:00 PM – 10:00 PM	USD, CAD	Volatile, overlaps with London

Best Session for Trading Each Currency Pair

• EUR/USD, GBP/USD, USD/CHF → London & New York sessions
• USD/JPY, AUD/JPY, EUR/JPY → Tokyo session
• AUD/USD, NZD/USD → Sydney & Tokyo overlap
• EUR/GBP, GBP/CHF → London session

Session Overlap Periods

The best trading opportunities often arise during session overlaps when liquidity and volatility increase:

London–New York Overlap (1:00 PM – 5:00 PM GMT)

• Most active time of day.
• Ideal for scalping, news trading, and trend continuation.

Sydney–Tokyo Overlap (12:00 AM – 7:00 AM GMT)

• Good for trading AUD/JPY and NZD/JPY pairs.

Fundamental vs Technical Session Alignment

Trading Style	Best Session(s)	Reason
Fundamental Trading	London, New York	Economic releases, central bank updates
Technical Scalping	London–New York Overlap	Tight spreads, high volatility
Swing Trading	London, New York	Strong directional moves
Range-Bound Trading	Asian Session	Lower volatility and consolidation

Case Study: Maximising Performance with Session Timing

Amira, a forex trader based in London, optimised her trading performance by focusing exclusively on the London–New York overlap for EUR/USD and GBP/JPY. By avoiding the quieter Sydney session, she reduced false breakouts and improved trade entries using breakout strategies and news catalysts. After three months of disciplined session-based trading, her average monthly gain improved from 2% to 6%.

Frequently Asked Questions

Which forex session is the most volatile?
The London–New York overlap is the most volatile and liquid period of the trading day.

Can I trade forex during any session?
Yes, but not all sessions offer equal opportunities. Choose the session that matches your strategy and the pairs you trade.

What is the quietest trading session?
The Sydney session has the lowest volatility and is often used for range-bound strategies.

When do most economic news releases occur?
During the London and New York sessions, especially in the early hours of each.

Should beginners trade during session overlaps?
Yes, overlaps offer the best execution, but beginners should use caution due to high volatility.

Conclusion

Knowing which forex trading session best suits your trading style can greatly enhance your decision-making and performance. By understanding market rhythms, session overlaps, and currency pair behaviour, traders can time their entries and exits more effectively. To master the art of session-based strategies and market timing, explore our CPD Accredited Trading Courses and take your forex skills to a professional level.