Forex sessions: hours, liquidity, spread

This lesson shows how to choose forex trading hours based on two measurable things: turnover in a given window and the entry cost you pay in that window. You will learn where the London–New York overlap falls, how spread and slippage change outside it, and how to turn these observations into a go/no-go rule for every hour. The material is for people who have already mastered basic forex skills and want to organise their daily plan.

If you do not yet have those skills, start with the basics: who is your counterparty and where does the spread on the OTC market come from. The lesson What is forex explains that.

Hours are approximate, because daylight saving shifts them relative to your time zone. Always map them to Europe/Warsaw and write them in your playbook in Polish time.

The three forex sessions and their hours in Polish time

Do not confuse narrower spread with absence of risk. During overlap, entry cost is lowest, but that does not mean the setup is better — it only means you pay less for the same decision. The liquidity measurement itself — RVOL, spread, and slippage expressed in R, plus sheet coverage — is covered in the lesson Volume and liquidity.

The same setup in two windows: a numeric example

Assume the identical setup on EUR/USD appears twice a week: once during the London–New York overlap, once in the middle of the Polish night. The stop is 30 pips, and you calculate entry cost as a share of one R:

entry_cost_R = (spread_pips + slippage_pips) / stop_pips

The same technical signal has a different economic value depending on the hour. With constant R, a difference of a few pips changes how much you must earn to breakeven. That is why the hourly filter is part of setup definition, not an optional add-on.

How to convert cost to decision thresholds

Pip values are hard to compare across pairs and position sizes. Convert them to a share of R, because that measure works regardless of whether you trade a standard lot or a micro lot:

1. Measure spread in your window across five sessions and record the median and the worst value.
2. Add real slippage from your own journal, not from the assumption that it will not happen.
3. Divide the sum by stop distance in pips — that is your entry cost in R.
4. Add exit cost, because exit spread may also be wider. Full round-trip means spread twice, not once (round-trip cost).
5. Compare with the threshold. As a working rule, use 10% R as the boundary (illustrative); above it, the setup has too little margin for ordinary execution problems.
6. Record the result in your journal together with the hour, so that after two weeks you can see the difference between windows.

Swap cost applies when holding a position overnight, and the lesson Swap and overnight costs describes it. In your daily plan, separate two things: entry cost, which depends on the hour, and holding cost, which depends on the horizon.

Go/no-go protocol for every hour

Instead of trading whenever there is time, evaluate the window before the session and record the verdict:

1. Choose one or two windows of 2–3 hours. Trading 24/5 is not the same edge stretched over time — it is several different markets.
2. Check the calendar for today. High-impact publications define no-go periods (Calendar in practice).
3. Record D1 and H4 levels before the window opens, so you do not look for them live.
4. Set a limit on the number of trades and daily loss for that window separately.
5. Write a list of allowed pairs. Majors and cross pairs have different spreads at the same moment.
6. After the session, add the spread median and result in R. Without this entry, the protocol is only a declaration.

A written window in Polish time, accounting for daylight saving, is what distinguishes a plan from a good intention. The rest of the rules go into a file you return to daily — similar to the lesson Session playbook.

Liquidity and macro publications

Even in London, just before an inflation reading or a central bank decision, spread and slippage can eat part of R. Liquidity does not disappear, but quotes diverge. The plan is simple: either exit the position before the publication, or enter only after things calm down and spread returns to normal.

Also write exceptions in your playbook: whether you trade on Monday morning after the weekend, whether you avoid the first minutes after a publication, and whether you close positions on Friday afternoon before the weekend. Without such rules, session window quickly turns into ad hoc trading.

Daylight saving time and DST: what to fix in your playbook

The switch to daylight saving or back shifts local session hours relative to London and New York. A signal recorded as at 15:00 may fall one hour before London opens or one hour after it.

Once per season, update the window table and check whether any term now overlaps with a data publication. Add a review of notes — the lesson Journaling and metrics explains how to compare results between periods when conditions change. It is a few minutes of work that protects you from trading in a dead window for several weeks in a row.

Session journal: table to fill

Keep one row per trading day. Fill it in after the session, based on notes, not from memory.

After two weeks, you have a comparison of windows based on numbers, not on the feeling from the last trade.

When the session says do not trade

1. When entry cost exceeds 10% of planned R (illustrative threshold). Then even a correct direction gives away profit in spread and slippage.
2. When a high-impact publication falls in the window and you have no written rule for that event.
3. When spread is wider than usual even without any publication. That is a signal that liquidity has dropped for longer than a few minutes — confirm the cause with your broker instead of entering in the hope that spread will return to normal.
4. When you trade outside your chosen window because something is happening. That is not a setup signal, it is an emotion signal.

Measurable exercise

For five business days, trade on demo only in one window of two to three hours, for example 15:00–17:30 Polish time. Each day record: median spread at entry, slippage, entry cost as a per cent of 1R, number of signals that appeared outside the window, and result in R. Complete the table and add one sentence of conclusion: whether the window quality was worth skipping the other hours. Make the comparison on five rows, not on the basis of one day.

Common questions

What Polish hours are good for learning FX?

Afternoon and early evening often work, that is the London-New York overlap. What matters more than the ideal hour is a fixed window written in your playbook and a spread measurement in that window.

Is Asia bad for trading?

It is not bad, it is different. On many majors the range is narrower, so a setup that needs a London impulse will not work. Do not judge a session without journal data, because one quiet day proves nothing.

How does daylight saving affect the session plan?

It shifts local hours relative to London and New York, so a window written in autumn may fall outside the session you care about after the change. Update the table in your playbook once per season.

Why measure spread as a percent of 1R rather than in pips?

Because a pip has a different monetary value on different pairs and at different position sizes, so on its own it does not say whether the cost is high. A share of R lets you compare windows and pairs on one scale and set a go/no-go threshold you can apply before every entry.