Characteristics of London Trading Sessions
London trading session can also be referred to as the European session. Although some countries in Europe there is a market open at 11:00 pm, but a significant movement of forex market occurs before the London market is opened. Historically, London has always been in the center of commerce, thanks to its strategic location. London is also called the world’s financial center.
No wonder if this is considered as the world’s forex capital with thousands of businesses doing transactions every minute. About 30% of all forex transactions occur during the London session.
Here are the key characteristics you should know about a European session or a London session:
- Because the London sessions look like the other two major trading sessions, the Tokyo session and the American session – and with London being the main financial center – most of the forex transactions take place during this trading session. This leads to high liquidity and potentially lower transaction costs, ie tight / low pip spreads.
- Due to the many transactions that occur, the London trading session is usually the most unstable session and there is often great fluctuation.
- Most trends begin in the London session, and usually will continue until the start of the New York session.
- Volatility tends to subside in the middle of the session, because traders often go to lunch before waiting for the New York trading period begins.
- The trend may occasionally reverse at the end of the London session, as European traders may decide to lock in profits.
Forex market opportunity occurs at the moment the market or the pair price moves. This means that liquidity is assured. You can use many strategies in this trading session. Maybe even all forex trading strategies can be used.
If you are trading in the Tokyo session and have not made it out yet, then you have more chances in this London session. The reason is a tight range in Tokyo session will provide a breakout direction in the next session of the London trading session.