Throughout each twenty-four-hour period, forex traders have access to four trading sessions. Due to varying time zones, these sessions frequently overlap throughout the day. The New York session, which takes place when the US markets open, will be covered today. The “North American” trading session is what some traders call it.
Knowing which currency pairs and opportunities to focus on throughout your trading session is essential for currency traders. A comprehensive guide to getting started is below. When deciding which currency pairs to trade during the New York session, it may also be beneficial to consider filing for an LLC in New York, as it can provide liability protection and other legal benefits for traders.
What is the Best Time to Start Trading in NY Session
Many newcomers to forex trading make the error of entering the market immediately. Before attempting to trade all day, some examine several economic calendars. While the 24/5 foreign exchange market hours make this possible, a better trading strategy must be developed. This bad strategy can quickly drain your resources!
Before moving on, you must first realise that Wall Street and the Forex market are two distinct things. One works during regular business hours, while the other does so in four other time zones and regions of the world.
Trading might take place day or night, according to this. Knowing when the markets open means you won’t have to stay up all night. It’s a strategy that helps you build up the ideal trading objectives, increasing your chances of maximising your profits.
The following is a overview of the four different trading sessions:
- Our current focus, New York, is open from 8 AM to 5 PM. Foreign traders follow it closely since it is the second-largest trading session.
- Tokyo handles the largest portion of Asian trading and is open from 7 PM to 4 AM. After Hong Kong and Singapore, this is the first trading session to open in Asia.
- Sydney is the first market to open globally and is open from 5 PM until 2 AM. Even though it’s the shortest of the four trading sessions, Sunday afternoons see a lot of activity.
- London opens at 3 AM and ends up at noon. The London session is one of the best for technical traders, accounting for nearly 43% of all global trades.
Best Major Currency Pairs to Trade in NY Session
The New York currency trading session offers the longest trading hours for individuals looking to trade currency pairs. Also, it briefly overlaps with other sessions, such as the European and London sessions, for a few hours.
One of the most traded main currency pairs in the world is the EUR/USD pair. Additionally, the European session frequently overlaps with the start hours of the New York session, which means institutions and European traders are continually buying and selling it. This suggests that you will probably have high liquidity and a surplus of opportunities throughout this session.
The GBP/USD pair is another one to trade during the New York session because the London session overlaps with the NY session. Compared to the European session, the overlap is significantly greater. Because it is a great indicator of the current state of the US and UK economies, this pair is a favourite among experienced traders.
It’s one of the best pairs to trade since it frequently begins as the Asian trading session is about to start. It acts as a safe haven asset for NY session traders, allowing it to move strongly when presented with either risk-on or risk-off opportunities.
Pip Ranges to Consider for the NY Trading Session
While trading currency pairs, every trader has a different strategy. Some traders prefer to trade a pair based on pip values rather than the risk that the pairs carry. For such traders, they should:
Use the rule of thumb to avoid any unusual pairs when it comes to pip values. During the North American trading session, stick to the major currency pairs when placing trades.
Choose the big pairs, such as EUR/JPY, GBP/JPY, USD/CHF, and USD/CHF, if you are an intraday trader with a high risk tolerance. These pairs are the best since they have daily price swings, which can rise by up to 120 pips on a successful trading day.
To continue trading after the US equities and bonds market closes, foreign investors who are trading during the New York session must change their native currencies into dollars, euros, Japanese yen, and Swiss francs.
Risks and Strategies Involved
The trending currency pairs are an excellent trading strategy to use during the New York Session. While such a strategy will undoubtedly increase their profits, it can also carry high risk.
The market tends to move rather strongly in such cases. The trader will need to continuously review and assess their trading strategy. Not to mention the ongoing requirement to adjust to unexpected price changes and shifting market conditions.
Trading such pairs may cause a trader to abandon their preferred long-term trading strategy, such as,
- Executing a stop loss
- Changing a winning position to a losing one
A trader may even stop their order(s) execution in specific cases. The system frequently fails to carry out the trader’s preferred price range orders.
All of these occur when price slippages and other trading scenarios are brought on by high volatility. When important data related to the economy is going to be disclosed, you should anticipate to encounter such scenarios.
The Best Time to Execute Trades During the NY Trading Session
You may develop a better trading strategy for the major currency pairs and exotic pairs by knowing when the largest volume of trades happens in the US. This often happens between 3 and 7 PM GMT +2 on a daily basis. That is when most European investors are opening and closing their trade positions. You should be aware that this is also the time when liquidity is at its highest. After this period, trading often slows down until picking back up after the Asian (Tokyo) markets open.
Currency pairs see huge price ranges when there is a trading overlap between the New York and London trading sessions. More investors are involved, which has led to wider price ranges. Adopting the breakout strategy is required since an overlap causes significant price movement.