Sydney Session
The Sydney trading session is the early part of the global trading day when Australia is active. In forex, traders often treat it as the practical "day open" because it kicks off the Asia-Pacific window.
In plain English: "Sydney is where the new trading day begins, usually with lighter liquidity before Tokyo warms up."
What Is the Sydney Trading Session?
The Sydney session refers to the period when Australian markets are open and active. It often overlaps with the initial phase of the broader Asian session and builds into Tokyo.
- Often considered the start of the FX trading day
- Liquidity is typically lower than Tokyo, London, or New York
- Important for AUD and NZD-linked flows when catalysts are present
Why Sydney matters
If you trade AUD/NZD pairs or you're active during UK late evening, Sydney is where the day's first "real" liquidity begins to form.
Typical Sydney Session Times (UK Time)
Session times shift with daylight saving changes. As a practical guide, Sydney activity is mostly:
- Late evening to early night (UK), building into Tokyo overnight
⚠️ Practical tip
Use your platform's spreads and volatility readings to identify when liquidity "turns on". The market does not behave identically every day, even within the same session label.
Liquidity and Volatility in the Sydney Session
The Sydney session is often one of the quieter periods of the 24-hour trading cycle. This can mean:
- Lower liquidity: fewer participants active compared with later sessions
- Wider spreads: especially on minor and exotic pairs
- Range tendencies: price may drift until Tokyo or major catalysts arrive
Typical pattern
Sydney can form the early "base range" for Asia. Tokyo may expand that range if JPY flows or risk sentiment shifts.
⚠️ When it gets active
Volatility can rise around Australia/New Zealand data releases, central bank commentary, or global risk headlines that hit during early Asia.
What Tends to Move During Sydney Hours?
Instruments most linked to Australia/New Zealand and early Asia risk can be more relevant:
- AUD pairs: AUD/USD, AUD/JPY, EUR/AUD
- NZD pairs: NZD/USD, NZD/JPY
- Commodities/risk sentiment (varies): some traders watch iron ore sentiment proxies and broader risk tone
⚠️ Cost awareness
If spreads are significantly wider in your broker during Sydney hours, your strategy may need larger targets or smaller size to stay viable.
How to Trade the Sydney Session
Sydney can be useful if you match expectations to the session:
- Range/mean-reversion approaches can work if price is calm and contained
- Event-driven trading can work around Australia/NZ releases (with strict risk control)
- Preparation: mark early Asia highs/lows to watch into Tokyo and later sessions
✅ Beginner-friendly rules
- Prefer liquid pairs (majors and major crosses) to reduce spread cost
- Trade smaller if liquidity is thin
- Avoid overtrading in slow drift conditions
- Know the calendar for Australia and New Zealand releases
⚠️ Execution note
Thin liquidity can increase slippage on stop orders. If your strategy depends on tight execution, consider trading later sessions or instruments with better liquidity at your time.
Common Misconceptions
- "Sydney is useless."
It can be quieter, but it matters for AUD/NZD and early Asia range formation. - "Quiet means safe."
Thin liquidity can actually make fills worse and spreads wider. - "Sessions are fixed."
Liquidity waves depend on news, positioning, and which instruments you trade.
✅ Quick Checkpoint
Try answering before expanding the model answers.
1) Why do traders treat Sydney as the start of the FX day?
Because it is the first major Asia-Pacific centre to open, starting the daily liquidity build into Tokyo and then Europe/US.
2) What is a common downside of trading during Sydney hours?
Lower liquidity can lead to wider spreads and potentially more slippage on some instruments.
3) Name two pairs often watched around Sydney.
Examples: AUD/USD, NZD/USD, AUD/JPY, NZD/JPY.
Frequently Asked Questions
Is Sydney the same as the Asian session?
Sydney is part of the broader Asian session. Traders often say "Sydney" for the early Asia hours before Tokyo becomes fully active.
Why are spreads sometimes wider in Sydney?
Fewer participants are active compared with London or New York, so pricing can be less competitive—especially on less liquid pairs.
Can I day trade during Sydney hours?
You can, but you should adapt expectations. Strategies that rely on high volatility may struggle, while range-based approaches can be more suitable if costs are manageable.
How do I know if Sydney conditions are good today?
Watch spreads, average candle size, and whether price is forming clear structure (range or trend). If everything is choppy with wide spreads, reduce size or skip the session.
Summary
The Sydney session often marks the practical start of the forex trading day. It can be quieter than later sessions, with lower liquidity and wider spreads on some instruments. It becomes more relevant around Australia/New Zealand events and as the early Asia range forms ahead of Tokyo and London.