Definition: what “New York Session” means
“New York Session” in forex usually refers to the trading hours when major financial markets in New York are active. In practice, people use it as a time-window label because market activity often changes around local open and close times (for example, liquidity can be higher when institutions are active, and lower when fewer participants are trading).
A worked example is a scenario that uses explicit numbers and clearly stated assumptions to illustrate how session timing may affect execution variables (like liquidity, spread, and volatility) and how you would calculate a result under those assumptions. It is not proof of future outcomes.
Mechanism: how a worked example “works”
To make a worked example verifiable, keep two parts separate:
- Stable mechanics (how you calculate): For instance, converting pips to profit/loss, and computing costs as “spread + slippage” in pips.
- Variable conditions (what can change): Volatility during the session, the actual bid-ask spread, slippage during fast moves, and the exact session boundaries for your time zone.
A simple way to model this in a worked scenario is:
- Assume an entry price and an exit price expressed in pips movement.
- Assume a trade size (so pip value per unit is definable).
- Assume costs measured in pips (spread/commission/slippage), even if you later replace them with your own real figures.
- Compute net pips = (price move in pips) − (total costs in pips).
- Compute net profit = (net pips) × (pip value for your assumed position size).
Evidence or example: a transparent numerical scenario
Below is one worked example with explicit assumptions. No live prices are used.
Assumptions (you can change them and recompute):
- Trade instrument: assume it behaves like a typical EUR/USD-style “pip” convention where 1 pip = 0.0001 in price terms.
- Position size: 10,000 units of base currency (a common “mini” size used for illustration).
- Pip value: assume $1 per pip for this position size (this is a simplification for demonstration; pip value can differ depending on the currency pair and account currency).
- Timing: entry happens during New York Session hours, and exit is assumed 2 hours later (the key point is that the same holding period is defined relative to the session window).
- Price move (gross): assume the mid-price moves +25 pips over the holding period.
- Costs: assume total transaction cost is 3 pips, combining spread and execution effects. This is not a claim about actual spreads—just a numeric assumption for the example.
Calculations:
- Net pips = 25 − 3 = 22 pips
- Net profit = 22 pips × $1/pip = $22 (under the assumed pip value)
How this relates to New York Session: If, in your own observations, you find that during New York hours the bid-ask spread is usually wider or execution is usually worse, that would effectively increase the assumed “costs in pips.” If volatility tends to be higher, it could change the assumed gross price move. This is why the worked example focuses on recomputation: you test different assumptions rather than trusting a single outcome.
Limitations and risks (material failure modes)
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Session boundaries can differ by definition. “New York Session” may be mapped to time zones and calendars differently by different platforms or communities. If your session window is off by even an hour, the data you use for verification may not match.
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Costs are variable and execution matters. The biggest failure mode of simplified worked examples is underestimating real trading frictions. Slippage can occur during fast moves, and effective spread can differ from the displayed spread.
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Volatility and liquidity are not stable. Higher activity does not mean higher directional predictability. A session can be active and still move in either direction.
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Pip value simplifications may be wrong for your account. The “$1 per pip” assumption depends on pair, account currency, and contract specifications. If your pair or account currency differs, your recomputation needs the correct pip value.
Verification: how to independently check the facts
To verify your own understanding of New York Session and the worked example approach:
- Check your session timing by comparing your platform’s displayed trading hours to your local time zone.