When Can You Trade Forex: London Session

 

Just when Asian market participants are starting to close shop, their European counterparts are just beginning their day.

While there are several financial centers all around Europe, it is London that market participants keep their eyes on.

 

Historically, London has always been at a center of trade, thanks to its strategic location.

Today, London benefits from its time zone. London’s morning overlaps with late trading in Asia and London’s afternoon overlap with New York City.

 

It’s no wonder that it is considered the forex capital of the world with thousands of folks making transactions every single minute.

 

About 43% of all forex transactions happen in London.

 

Some traders also refer to the London session as the “European” trading session.

That’s because aside from London, there are major financial centers open in Europe as well, such as Geneva, Frankfurt, Zurich, Luxembourg, Paris, Hamburg, Edinburgh, and Amsterdam.

 

I built a Forex Market Hours tool that will automatically convert all four trading sessions in your local time zone. Use it as a reference until you remember the market hours from memory. 🧠

Below is a table of the London session pip ranges of the major currency pairs.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

These pip values were calculated using averages of past data. Take note that these are NOT ABSOLUTE VALUES and can vary depending on liquidity and other market conditions.

 

Also, the session range for EUR/CHF has not been included since the Swiss franc has been pegged to the euro at 1.2000 during the period.

 

Here are some neat facts about the European session:

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• Because the London session crosses with the two other major trading sessions–and with London being such a key financial center–a large chunk of forex transactions take place during this time. This leads to high liquidity and potentially lower transaction costs, i.e., lower pip spreads.

• Due to the large number of transactions that take place, the London trading session is normally the most volatile session.

• Most trends begin during the London session, and they typically will continue until the beginning of the New York session.

• Volatility tends to die down in the middle of the session, as traders often go off to eat lunch before waiting for the New York trading period to begin.

• Trends can sometimes reverse at the end of the London session, as European traders may decide to lock in profits.

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Which Pairs Should You Trade?

 

Due to the substantial number of transactions taking place, the European session boasts abundant liquidity, allowing nearly any currency pair to be traded.

Opting for major pairs (EUR/USD, GBP/USD, USD/JPY, and USD/CHF) might be preferable, as they typically have narrower spreads.

Furthermore, these major pairs are directly affected by any news reports released during the European session.

Another option worth exploring is the yen crosses, specifically EUR/JPY and GBP/JPY, which tend to exhibit significant volatility during this period.

It's essential to note that, being cross pairs, the spreads for these yen crosses might be slightly wider.

Transitioning to the New York session, often considered a bustling and dynamic environment, one might recall Alicia Keys' song, "Empire State of Mind," capturing the essence of this time.

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