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LONDON TRADING SESSION FOR EUROPEAN FOREX TRADERS

When we trade forex, the time we trade are divided into 4 sessions, which are: Tokyo, Sydney, New York, and London. Each is named after the biggest financial market in its continent. Today, we will focus on the London session, the most important time to trade for European traders.

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About London trading session

The London session starts at 8 a.m. (GMT) and ends at 5 p.m. So when the Tokyo session is about to close (close at 9 a.m.), it’s a new trading day in London. Although there are several big financial markets in all of Europe, London always gets the most attention. That’s why it was chosen to name the Europe session.

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Many traders pick this session to trade forex because it is when Europe is most active financially. According to multiple reports, about 30% of the total trading volume in the world comes from the London session.

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Take a look at the table below to see how much the prices fluctuate during the London session:

Currency pairAverage fluctuation measured in points
EUR/USD114
GBP/USD127
USD/JPY66
AUD/USD83
NZD/USD72
USD/CAD96
USD/CHF102
EUR/JPY129
GBP/JPY151
AUD/JPY107
EUR/GBP61
EUR/CHF109

Some characteristics of the London sessions

  • Because half of the London session takes place at the same time of the New York session (from 1 p.m. to 22 p.m.), another huge financial center, a great deal of trading will be carried out. This makes the liquidity higher and the spread lower.
  • Since the trading volume of this session is enormous, it is super volatile.
  • Most trends will begin during this London session and end in the New York session.
  • Volatility is likely to stop at the middle of the session because traders stop trading to have lunch and wait for the New York session to open.
  • Reversal tends to happen at the end of this session as European traders decide to close their positions.

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That’s what you need to know about this trading session. This is a very exciting time to trade with lots of opportunities but there is also risk. In my opinion, the London trading session is most suitable for scalpers and short-term traders.