Forex three sessions London session

In the previous article, we briefly introduced Tokyo session, its feature and what we should trade during this session. By following the sun moving, we are going to talk the second important session – European session, also called as London session since London is the European financial center. Actually, London has long been the world’s financial capital for finance, insurance and banking before the US took over as the market of choice for most exchanges.

The official business hours in London run between 7:30am and 3:30pm GMT. However, the trading period is expanded because other capital markets presence before the official open in UK, such as the Germany and France financial market. The end of the session is pushed back as volatility holds until the London fix after the close. Thus, Typically European session hour is from 7am to 4pm GMT.

There is something to be remembered for trading in this session:
As the good geographic location, London session crosses with the two other major trading sessions and with London being a key financial center. Generally, a large amount of forex transactions take place during this period. As a result, the high liquidity and low spread will be happened during this session. The trading session also the most volatile session, this is also the most profitable session.

Normally, the trends start in London session will continue until the beginning of New York session.

The volatility normal becomes quite before the New York market open; this time is also the lunch time in London. Most of traders are going out for lunch, summarize the trades in the morning and prepare for the New York market opens.

As the other European markets are close earlier than London market, so the trends can sometimes reverse at the end of the London session as the European traders would like to lock in profits.

Because many European banks are headquartered in London, there are fewer trades placed, but it is common for these less frequent trades to be larger in size. This market phenomenon often inspires technical traders to flock to the London trading session to ride the waves. Pattern traders rejoice; there is plenty of money to be made

London session is the only trading time for Euro which is very important global currency officially used by multiple counties.

What we should trade during this session? The liquidity during this session is huge, so almost any pair can be traded. Especially, stick with majors (EUR/USD, GBP/USD, USD/JPY and USD/CHF) as they normally have the smallest spreads and these pairs that are normally directly influenced by any news reports. Some cross currency pairs are becoming volatile as well, such as EUR/JPY and GBP/JPY.

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