London, New York or Asia? Find the trading session that works for you
The same strategy can perform completely differently in different sessions. We show how forex volatility changes over the day and how to find out when you trade best.
The market shows different faces throughout the day
Forex trades 24 hours a day, but liquidity and volatility change significantly over the course of the day. The Asian session tends to be calmer, the London session brings the highest volumes and the New York session strong moves around US economic data releases. A breakout strategy therefore behaves differently at 9 am than at 3 pm.
The London and New York overlap
The most active part of the day is the overlap of the London and New York sessions, roughly between 14:00 and 18:00 Central European Time. Spreads tend to be at their lowest and moves at their largest, which favors momentum strategies. At the same time, you will hit your stop loss faster if you enter a move late.
Economic data and higher-risk times
Releases of inflation figures, interest rate decisions or labor market data can move the market more in a few minutes than an entire session. If you trade around these events, expect more slippage and wider spreads. Many prop firms also have their own rules for trading the news.
Let your own data decide
General recommendations are only a starting point. Split your closed trades by entry hour and day of the week and compare the results. It often turns out that most of your profit comes from one session, while the rest of the day only dilutes the result.
Time analysis in unalyze
The trading calendar in unalyze shows your results day by day, along with the details of every trade, including its closing time. This makes it easy to compare on which days and at which hours you have historically done best.
