Forex Trading Sessions: How London, New York, Tokyo and Sydney Overlaps Change Spreads and Volatility

What a forex session actually is

Spot forex has no central exchange. Dealers quote prices to each other and to clients around the clock, so a "session" is simply the business day of a financial centre, measured on the local clock. Four are in common use: Sydney, Tokyo, London and New York.

That creates two practical problems. Session times move against UTC whenever a centre changes its clocks, and the edges are fuzzy to begin with: some providers draw Sydney as 07:00–16:00 local time, others as 08:00–17:00. Use the table below as a working map.

Tokyo is the fixed point: Japan does not observe daylight saving, so its session stays at 00:00–09:00 UTC all year. Most retail brokers run the trading week from Sunday 17:00 to Friday 17:00 New York time, which is 22:00 UTC in winter and 21:00 UTC in summer. That is a broker convention, not an official rule, so check the hours your own broker publishes.

The overlap: four hours, sometimes five

London and New York usually sit the same distance apart, which gives the familiar four-hour overlap: 08:00–12:00 New York time.

Clock changes break that pattern, because the US and Europe do not switch on the same dates. The US moves its clocks on the second Sunday of March and the first Sunday of November. The UK and EU move on the last Sunday of March and the last Sunday of October. For a few weeks each year the two sides disagree, and the overlap stretches to five hours (12:00–17:00 UTC). In 2026 that happened for three trading weeks starting 9 March, and once more for a single week in late October.

If you hard-code session hours into an alert, a script or a trading plan, you will be an hour off in those weeks.

What the BIS data show

The best public source on the size of the market is the Triennial Survey run by the Bank for International Settlements (BIS) every three years in April. In April 2025 turnover averaged about $9.5 trillion a day. Treat that as a high-water mark: the BIS estimates that more than $1.5 trillion of it came from the burst of trading after the US tariff announcements and the sudden fall in the dollar.

Two other findings matter for session planning. The US dollar was on one side of 89.2% of trades (preliminary figure), and all ten of the most traded currency pairs include it, which is one reason New York hours matter so much for the majors. And the UK is by far the largest dealing centre, with about 38% of turnover.

There is an important detail here that is easy to miss. The "Asian session" is usually labelled after Tokyo, but Singapore and Hong Kong together handle about 19% of turnover, more than five times Japan's share.

There is also one catch. BIS figures are based on where the dealer's sales desk is located, wherever the trade is executed, and they are published as one monthly total divided by the number of business days. They do not say how much trading happens during London or New York hours. When you read that London accounts for 38% of trading, that describes where desks sit. We found no public central-bank dataset behind the precise percentages for the overlap that circulate on broker websites, so we do not repeat them.

What the research says about liquidity through the day

The best hard evidence on intraday patterns is older and narrower, but it is real. Takatoshi Ito and Yuko Hashimoto studied firm quotes and transactions on the Electronic Broking System (EBS), an interdealer trading platform, for the yen–dollar market (NBER Working Paper 10856, October 2004). They found that:

There are three limitations worth keeping in mind. The data are two decades old, they come from the interdealer market rather than retail platforms, and they cover one pair. Use them to understand how liquidity moves through a day; they will not tell you today's spreads. Your own broker's quotes will differ, and the only way to find out by how much is to record them.

• Quote and trade activity is high in the opening hours of Tokyo, London and New York, and low during the Tokyo and London lunch hours and in the late New York afternoon.
• Activity does not rise toward the end of business hours in the three centres, even in New York on Friday.
• The bid-ask spread is narrow when quote and deal frequency are high and wide when they are low. The exception is the first hour of Tokyo (00:00 UTC), when spreads are wide despite high activity.

What the wrong hour costs

Take a hypothetical trader who buys 0.5 standard lots (50,000 units) of EUR/USD. On a USD-quoted pair a standard lot is worth $10 per pip, so this position is worth $5 per pip. Suppose the trader is quoted two spreads, both invented for illustration: 0.6 pips in a liquid window and 1.8 pips in a thin one.

The $600 gap is 6% of a $10,000 account, before commissions and before any slippage. A round trip costs one spread, because you buy at the ask and sell at the bid. If a trade targets 10 pips, 0.6 pips is 6% of the move and 1.8 pips is 18%.

The exact figures will vary by broker. What matters is the difference: spread costs add up quickly when a strategy generates a lot of trades, while a position held for weeks barely notices them. That is the sort of difference that is easy to ignore on one trade and hard to ignore after a few hundred.

When scheduled news arrives

Session hours are only part of the picture. Scheduled economic releases can change market activity within minutes, and each one lands at a fixed local time, so its place on the session map shifts with the clock changes described above.

The London 4 pm fix deserves a line of its own. It is the benchmark rate that many index providers and fund managers use to value and convert currency holdings. Since 15 February 2015 it has been calculated over a five-minute window centred on 16:00 London time, up from one minute. In most weeks 16:00 in London is 11:00 in New York.

Putting a session rule into your trading plan

Once the clock is understood, a session rule is short and specific.

1. Pick the hours your pair is most active. Currencies tend to be busiest when the desks of their home markets are open, so a pair's own hours are a sensible starting point. Test that rather than assume it.
2. Write down no-trade windows around the events above. Decide in advance whether you trade through a release, stand aside, or only manage open positions.
3. Set alarms for the weeks when clocks disagree. There are three of them in March and one in late October; the exact dates depend on the calendar.
4. Log the spread at entry. A column in your journal is enough. After a month you will know your broker's spread profile by hour, which is better than any published average.
5. Respect the Sunday open. The weekly open at 17:00 New York time can gap if news arrived over the weekend, so avoid placing market orders in the first minutes.