i. Also known as New York trading session.
ii. North American trading session beings at 1 pm UTC and closes at 10 pm UTC.
iii. Currency pairs including USD, EUR, and GBP are very active during this session.
What is the North American trading session?
The forex market that we know it as, is an over-the-counter and decentralized marketplace where the exchange of foreign currency takes place between buyers and sellers.
This exchange of currency pairs has become a crucial part of the world economy and there are banks, funds, governments, and other financial institutions that look to participate in this.
The world does not function in one single time zone, hence the forex market is up and running throughout the day to allow traders from Australia, Asia, London, and New York regions to carry out their trading activities in the forex market.
The forex market is open for 24 hours a day and this time period is divided into a couple of trading sessions. The North American trading session is one such forex trading session.
The North American trading session begins at 1 pm UTC and closes at 10 pm UTC, which is actually 8 am to 5 pm in the American time zone.
Just when the European trading session is about to end, the North American trading session begins and we have a bit of time overlap between these two trading sessions.
There is an overlap of around 3 hours, this means that both markets are open at the same time.
The North American trading session is also known as the New York trading session as New York is considered to be the biggest financial city in the US, if not the world.
Currency pairs to trade in the North American trading session
If trends are said to be formed in the European trading session, then the North American trading session acts as a decider for the trend as it is in this particular session where the trend either continues or we can see a sharp price reversal.
The US Dollar being the major currency and the United States being the hub for finance, this trading session is tracked carefully by traders around the globe.
News releases in the American region will affect prices of the US Dollar which will, in turn, have some effect on all major currency pairs and the minor currency pairs will see some effect too.
As the European and the North American trading sessions are open at the same time, volatility and liquidity are at the highest and the time overlap between these two sessions is considered to be the most volatile time of the day in the forex market.
Coming to which currency you can trade in the North American trading session, your options are wide open. You can trade all currency pairs that include the European currencies such as EUR and GBP as well as the currency pairs with the US Dollar.
Trade major currency pairs such EURUSD, GBPUSD, USDCAD, etc., and the minor currency pairs such as EURGBP, EURCAD, GBPCAD, etc. with ease.
Volumes and liquidity will be high and spreads will be low. Your trades will get executed at the market very quickly and there will a lot of price swings that you can take good advantage of.
Who trades in the North American trading session?
New York is a big city and a very important city in finance. There are numerous in New York itself that carry out trading activities and there are traders from other regions that track the North American trading session for trading opportunities.
If you are some who lives in the North American region and are up and awake then you can always trade during this session.
But does this mean those who aren’t from the North American region and those who are sleeping awake in their respective regions cannot trade in the North American trading session? No.
You can trade in the North American trading session from anywhere.
If you are a swing trader you can always set limit orders to buy or sell the currency pairs. The orders that you place can get executed during any trading session including the North American trading session and you may get the advantage of the high liquidity and volumes.
Strategies to use in the North American trading session
I am often asked by traders about the strategies that can be used during this session to capitalize on the price swings and I really feel this is not a good question to ask.
You don’t choose strategies based on the session you trade in. You choose strategies based on what currency pairs you are trading and what you are comfortable handling.
You can use any given strategy to capitalize on price swings in the North American trading session, be it based on technical and fundamental analysis.
So how I trade is I use moving averages and supply and demand zones. The moving averages tell me about trend direction and the demand and supply zones tell me where the value areas are.
Based on this holistic information I am able to take sniper entries and capitalize on price swings in any given trading session.
Which session do you trade in?
Which forex trading session do you particularly like to trade in and what kind of strategies do you use to capitalize on the price swings of currency pairs during the trading session? Do let me know.
Don’t forget to share this blog post with other traders and let them also understand what the North American is exactly.
Feel free to reach out in the comments section below for any questions or anything in general and I will get back to it at the earliest.