Trade Now
Pip Volatility Per Hour for Major Currency Pairs
The New York trading session, which runs from 13:00 to 22:00 GMT (8:00 AM to 5:00 PM New York time), is a crucial period for forex traders. During this time, approximately 17% of all global forex transactions take place. The volatility experienced during the New York session can vary significantly across different currency pairs.
Here’s a detailed breakdown of the average pip volatility per hour for the major currency pairs during the New York session:
| Currency Pair | Average Pip Volatility Per Hour |
|---|---|
| EUR/USD | 6-8 pips |
| USD/JPY | 7-9 pips |
| GBP/USD | 7-10 pips |
| USD/CHF | 6-8 pips |
| AUD/USD | 7-9 pips |
| NZD/USD | 8-10 pips |
| USD/CAD | 7-9 pips |
The EUR/USD pair, being one of the most liquid and widely traded currency pairs, typically exhibits a pip volatility of 6-8 pips per hour during the New York session. This means that the price of the EUR/USD pair can fluctuate by an average of 6-8 pips within a given hour.
Similarly, the USD/JPY pair experiences a pip volatility of 7-9 pips per hour, while the GBP/USD pair can see a volatility of 7-10 pips per hour. The USD/CHF pair, known for its relatively lower volatility, has an average pip volatility of 6-8 pips per hour.
The commodity-related currency pairs, such as AUD/USD and NZD/USD, tend to have a slightly higher pip volatility of 7-9 pips and 8-10 pips per hour, respectively, due to their sensitivity to global economic and geopolitical events.
Finally, the USD/CAD pair, which is influenced by the Canadian and U.S. economies, has an average pip volatility of 7-9 pips per hour during the New York session.
It’s important to note that these values are general guidelines, and the actual pip volatility can vary depending on market conditions, news events, and other factors that may impact the trading activity and price movements during the New York trading session.
Maximize your profit by copy Our Trade
The New York Trading Session
The New York trading session can actually be divided into three distinct sessions:
| Session | Time (EST) |
|---|---|
| Morning session | 8am – 12pm |
| Lunch session (or lunch hour) | 12pm – 1pm |
| Afternoon session | 1pm – 4pm |
Morning Session (8am – 12pm EST)
The morning session is typically the most active and volatile time during the New York trading session. This is when most of the trading action happens. Traders are fully engaged, and market activity is at its peak as European traders start their day and American traders begin their workday.
Lunch Session (12pm – 1pm EST)
The lunch session, also known as the “lunch hour,” is a relatively quieter period. Trading activity slows down as traders take a break for lunch, and market volatility tends to decrease during this time.
Afternoon Session (1pm – 4pm EST)
The afternoon session sees a gradual decline in trading activity as the U.S. stock market closes at 4pm EST. While trading can technically continue until 5pm EST, it is generally not considered safe to trade beyond 4pm when the stock market closes, as trading activity and liquidity tend to diminish significantly during this time.
It’s important to note that the most significant trading volume and volatility typically occur during the morning session, as this is when the majority of traders are actively engaged in the market. The afternoon session is generally less active, and traders may need to adjust their strategies and risk management accordingly.
Trade Now
Tips on Trading the New York Session
High Liquidity During the Morning
The morning session of the New York trading session overlaps with the European session, resulting in high liquidity during this time. This makes the morning session an opportune time for trading.
Economic Reports and Dollar Trades
Most major economic reports are released near the start of the New York session. Since around 85% of all trades involve the U.S. dollar, the release of these reports has the potential to significantly move the markets.
Declining Liquidity and Volatility in the Afternoon
Once the European markets close, liquidity and volatility tend to diminish during the afternoon U.S. session. Traders should be mindful of these changes in market conditions.
Friday Afternoon Considerations
On Fridays, there is typically very little market movement in the afternoon, as Asian traders are away and European traders are focused on weekend activities, such as watching soccer matches.
Additionally, on Fridays, there is a higher chance of reversals in the second half of the session as U.S. traders close their positions to limit their exposure to any weekend news.
Tips on Trading the New York Session
High Liquidity During the Overlap with European Markets
The New York trading session overlaps with the European session, resulting in a ton of liquidity. Both the U.S. and European markets are open at the same time, allowing for increased trading activity. Banks and multinational companies are likely burning up the telephone wires, taking advantage of this heightened liquidity.
This high level of liquidity allows traders to virtually trade any currency pair, although it’s generally best to stick to the major and minor pairs, and avoid the more exotic ones.
U.S. Dollar (USD) as the Dominant Currency
The U.S. dollar (USD) is the most heavily traded currency during the New York session, as it’s the domestic currency of the United States. Since the USD is on the other side of the majority of transactions, traders and market participants will be closely watching for any economic data or news releases from the United States.
Focus on Crucial U.S. Economic Data and News
During the New York session, crucial economic data and news from the United States are typically released, such as the Federal Reserve’s interest rate decisions, GDP reports, and Non-Farm Payroll (NFP) data. If these reports come in better or worse than expected, it could dramatically shake up the markets, as the dollar will be jumping up and down in response.
Active Major Currency Pairs
Some of the major currency pairs that are particularly active during the New York session include EUR/USD, GBP/USD, USD/JPY, USD/MXN, and USD/CAD. Traders should focus on these pairs to take advantage of the high liquidity and volatility.
Is the New York Session Right for You?
If you’re based in North America or prefer trading during U.S. business hours, the New York trading session might be a good fit for you. This session offers ample liquidity and volatility, especially for currency pairs involving the U.S. dollar (USD).
The session’s focus on U.S. economic news also makes it attractive for news traders. They can capitalize on the market’s reaction to the release of crucial data points like interest rate decisions, GDP reports, and Non-Farm Payroll (NFP) figures.
However, if you’re uncomfortable with high volatility or prefer trading during off-peak hours, other trading sessions might be more suitable for your trading style and preferences. The increased market activity and news-driven price movements can be challenging for some traders, especially those who are just starting out.
It’s important to carefully consider your trading goals, risk tolerance, and personal schedule when deciding whether the New York trading session is the right fit for you. Experimenting with different sessions and finding the one that aligns with your trading approach can be a valuable learning experience.