Quick pop quiz!  What time of the day are TV ratings highest?  If you said during prime time, then you would be correct!

What does this have to do with trading sessions?

Well, just like TV, “ratings” (a.k.a. liquidity) are at their highest when there are more people participating in the markets.

So when is the best time to currency trade?

Logically, you would think that this happens during the overlap between the two sessions.

If you thought that way, you’d only be half-right.

Let’s discuss some of the characteristics of the two overlap sessions to see why.

Overlap Session One: Tokyo/London

Liquidity during the overlap of the Tokyo/London session is pretty thin for a few reasons.

Typically, there isn’t as much movement during the Asian session so, once the afternoon hits, it’s pretty much a snooze fest.

With European traders just starting to get into their offices, trading can be boring as liquidity dries up.

This would be an ideal time to chill, or look for potential trades to take for the London and New York sessions.