Bests pairs to trade during a New York session

If you wonder which are the best pairs to trade during the New York session, here are some insights. Let’s start with some interesting and useful facts.

Did you know that today, New York is the second-largest foreign exchange market? According to a Bank for International Settlements study, the US Forex exchange accounts for about 17% of the world’s total volume of Forex pairs transactions. 

What time does the New York trade session open? 

The New York session starts at 3 p.m. and ends at 11 p.m. GMT + 2. It’s also referred to as a North American trading session. 

The New York Forex trading market covers the largest number of trading hours of the day for trading currency pairs. So it overlaps for a few hours with other sessions, including the European session time zone. 

Best Forex pairs to trade with minimal risk 

For traders who want to minimize risk, here are the pairs to look for. 

Currency pairs like EUR/USD, USD/CAD, and USD/JPY are most suitable during the US session. The reason is simple: they are less volatile. Consequently, it offers traders the possibility of making attractive profits with a lower level of risk. 

The highly liquid nature of these pairs allows the investor to make profits or limit losses quickly and efficiently. 

At the same time, their relatively modest volatility provides a more secure trading environment. It represents an opportunity for traders who wish to implement long-term trading strategies.

Pip ranges of best Forex pairs during New York session

So, which are the best pairs to trade during the New York session having in mind their pips?

In general, you should avoid exotic pairs. Instead, the major pairs are preferable to trade during the New York trading session. During the New York session, currency pairs such as GBP/USD, GBP/JPY, USD/CHF, and EUR/JPY are the best to trade for intraday traders who have greater tolerance at risk.

That’s because the daily price movements of these pairs go up to 120 pips. 

When the US securities and bond markets open during the US session, foreign investors must convert their local currencies, such as the euro, Swiss franc, and Japanese yen, into dollar-denominated assets in order to trade. 

Check out the average pip ranges of best Forex pairs during the New York session.  

• EUR/USD – 77 pips
• GBP/USD – 68 pips
• USD/JPY – 34 pips
• AUD/USD – 68 pips
• USD/CHF – 56 pips
• NZD/USD – 62 pips
• GBP/JPY – 77 pips
• USD/CAD – 67 pips

However, beware that these are the average pips that can vary depending on many market conditions.

The best Forex pairs to trade during the New York session – strategies and risks involved 

Trading currencies during the US session can offer high profits. On the other hand, the trader needs to understand that it can be quite risky. During this time to trade, the market tends to move quite strongly. 

Therefore, traders must constantly analyze and revise the trading strategies. Also, they need to adapt to changing market conditions and sudden price movements. 

These could cancel out long-term strategies (execution of stop losses or conversion of winning positions to losing positions by example). Or even easily stop the execution of orders. 

In some cases, orders are not executed at a price desired by the trader. It’s due to price slippages and other similar situations that can arise when there is very high volatility. These situations are common during the release of important economic data.

The best time during New York Forex session to trade Forex pairs 

The highest volume of transactions during the US session occurs precisely between 3 p.m. and 7 p.m. GMT + 2, a period when European investors continue to open and close positions in the market and where liquidity is high. After this period, the pace of trading activity is usually significantly reduced to a minimum until the Tokyo market opens (Asian session).

Trading the Overlap – New York breakout strategy

When the London session and the US session overlap, these currency pairs have wider price ranges. And it’s because more investors are in the market. Therefore, the volume of transactions is higher compared to other periods of the trading day. During the overlap, the price movements are huge. Therefore, the most used trading strategy is the breakout strategy allowing traders to maximize the profits.

What affects the price of the best pairs during a New York trading session?

In most cases, currencies in the Forex market are quoted in US dollars and are traded against the US dollar before moving to other currencies. Let’s take, for example, GBP/JPY. If you want to convert a British pound into a Japanese yen, you must first trade against the dollar and then against the yen. 

For this reason, a transaction with GBP/JPY actually involves two transactions with different currency pairs: GBP/USD and USD/JPY. 

Because of this, the volatility of a currency pair like GBP/JPY is determined by the correlations between the two major currency pairs that are traded to produce the final buy/sell transaction with that pair. 

In the case of GBP/JPY, since both GBP/USD and USD/JPY have negative correlations (meaning that both pairs tend to move in the opposite direction), the volatility of the pair increases, which reflects in a wide range trading on this Forex pair virtually every day. 

We can also explain the price development of other Forex pairs like USD/CHF in similar terms. Nevertheless, the intensity of price changes is different.

In conclusion 

Here are a few takeaways to always have in mind for the best pairs to trade during the New York session. 

• Stick to majors like GBP/USD, GBP/JPY, USD/CHF, and EUR/JPY and avoid exotic Forex pairs.
• There is high liquidity during the morning New York session as the US session overlaps the European session.
• Before the start of the New York trading session, many economic reports occur. Therefore, during the US economic release, the market movements increase.
• After closing the European market, liquidity and volatility slowdown in the afternoon US session.
• There is little market movement Friday afternoon since the Asian and European market volatility slows down.
• During the second part of the New York session on Friday, there is the probability of reversals because New York Forex pairs traders close positions before the weekend to limit exposure to weekend economic news.