The Thin Window After New York Closes

[Shadow Trader]

Spreads rarely stay constant across the trading day, and the least discussed stretch is the gap between the New York close and the first Asian liquidity. Around the five o'clock New York cutoff, many liquidity providers reduce quoted depth, and retail spreads on majors can widen to several times their midday level.

A scalper whose target is two or three pips can find that this widening consumes most of the expected edge before price even moves. The quoted spread is only part of the picture, because thin books also mean wider gaps between consecutive ticks.

Records of actual fills by hour reveal the pattern better than assumptions. Logging the spread at entry for each trade, then grouping the results by hour of the server clock, shows which windows quietly add cost. Broker server time matters here, since the same wall-clock hour shifts with daylight saving changes in the United States.

Some strategies are built around the quiet hours deliberately, but that choice needs cost data supporting it. A setup that appears profitable in a backtest using a fixed spread may look very different once the real hourly spread profile is applied to each simulated entry.