Overlapping sessions

The darker circles in the tables above show where there is an overlap in trading sessions. Tokyo and London share an hour when the Asian session closes and London opens. London and New York also share four hours of trading from GMT 12:00 to GMT 17:00.

The significance of these overlaps is that there are considerably more traders trading at the same time, which affects the conditions of the market. When there are more active traders, there will be more liquidity in the market. Higher liquidity means that slippage is less likely, orders are more likely to be filled and the spreads on currency pairs are reduced. These tend to be good times to trade.

In the table above, you can see the price range movement of EUR/USD per hour, as the day progresses through a twenty four hour cycle. The red line represents the average movement and highlights the peaks and troughs throughout the day.

During the overlap of the Asian and the European session, and the overlap of the European and American session, you can observe that there is heightened activity. During this period, the price movement can be very volatile with rapid movement in both directions, especially at the very start of the overlaps, and so caution is advised when looking to trade.

Caution is also warranted when the trading week starts with the Asian session and when it ends with the New York session – at these particular times, the market volume is very low.