Even though it is possible to trade forex 24 hours a day, it is still important to understand when certain markets are open across the world. Even though you always have trading options, markets in various locations close, so you need to know when these markets, including the London Session, are going to open.
When the Asian markets are closing, European markets are opening for the day. Because of London’s location, it has always been an economic powerhouse. London’s morning usually overlaps with the close of the Asian trading day. Then, the London afternoon usually overlaps with New York City. Therefore, it should come as no surprise that London is largely considered a center of the forex world.
Below you’ll find key times for the London Session (all times are in EST):
|Overlap with Tokyo session||3AM-4AM|
|Overlap with New York session||8AM-12PM|
A Few Quick Facts About the London Session: European Trading
It is important to keep a few important points in mind when it comes to the London Session.
- The London Session overlaps with two other major trading sessions throughout the day. Because the London Session is responsible for such a large portion of trading, it usually has high liquidity and lower transaction costs.
- The London Session is also fairly volatile because there are so many trades that take place during the session.
- There are a lot of trends that unfold during the London Session. They usually continue until the New York Session opens.
- The volatility of the London Session tends to die off during the middle of the session because many traders go off to eat lunch before the New York Session opens.
- It is not unusual for many of the trends during the London Session to reverse at the end of the day, which is when many traders try to lock up their profits.
As you trade during the London Session, you might start to see these hot tips play out right before your eyes.
Which Pairs Are Best During the London Session?
Of course, there is no way to predict exactly which pair is going to trade well during a given session; however, because the London Session is so liquid, just about any pair can be traded easily. The tightest spreads usually take place with the majors, which include EUR/USD, USD/CHF, USD/DPY, and GBP/USD. They might also be influenced by any news reports that are released during the London Session or European Session.
You might also want to try a few yen crosses because they tend to be volatile during the London Session, which might open the door to some bigger profits. On the other hand, they tend to have wider spreads, so be careful.
You might want to think about your trading habits and how they compare to the London Session, the New York Session, and the Asian Session. This can help you find the right Forex market for your style.
As you can imagine, the pairs containing a European currency (EUR, GBP, and CHF, mainly) have a wider range during the London Session, since they are more heavily traded during these hours.
Below you’ll find a chart of the average pip range of major pairs during the London Session, an average range compiled by BabyPips.
Disclaimer: All information provided here is intended solely for study purposes related to trading financial markets and does not serve in any way as a specific investment recommendation, business recommendation, investment opportunity, analysis, or similar general recommendation regarding the trading of investment instruments. The content, in its entirety or parts, is the sole opinion of SurgeTrader and is intended for educational purposes only. The historical results and/or track record does not imply that the same progress is replicable and does not guarantee profits or future profitable trading records or any promises whatsoever. Trading in financial markets is a high-risk activity and it is advised not to risk more than one can afford to lose.