1.12 London Session

London trading session


The European session is flagged off by London opening shop to a brand new trading day.


London is renowned as a premier financial center, with its history of worldwide trade and Britain’s influence over global commerce over the centuries. The time zone of London and rather Europe makes its trading session to overlap with both Tokyo or Asian session as well as the New York session. This makes London session a strategically important session. A staggering third of all Forex transactions originate in London. FX traders all over the world are at their alert best when London opens – this is when the real action starts with approximately 30% of the total Foreign Exchange trades during this session!


London session – quick facts


  • The London session is known to be volatile due to the high volumes traded.


  • This is the only session which overlaps with both, the Tokyo session as well as the New York session.


  • Because of the sheer volumes, trading during the London session is marked by tight spreads, which is good for traders.


  • FX trading trends normally initiate during this session, as the larger players execute their trades when liquidity is the highest.


  • One may see a mid-session lull during lunch hours – a period often marked by low volatility.


Selecting the currency pairs to trade


You have pretty much a free hand here, because this session is marked by huge volumes and worldwide trading interest. As a result it is possible to trade practically any pair here, though as we mentioned, spreads are tightest for the majors. The most actively traded currency pairs are GBP/JPY, AUD/JPY, EUR/USD, EUR/JPY, USD/CAD, NZD/USD, AUD/USD and USD/CHF in this order. Please note that generally GBP/JPY is the most volatile currency pair. While we are talking about the most volatile currency pairs, overall the most volatile currency pairs are GBP/JPY, EUR/NZD and GBP/AUD respectively.


Which currency pairs you should trade?


Selecting the currency pairs need to take into account the volatility as more price movement offers possibilities of more gains. Of course the opposite is also true that it can make the losses bigger too. However, considering that you are trading with sufficient knowledge and discipline and maintaining a good risk-reward ratio in your trades, more price movement should result in more profits. Another important factor is the spreads. Tighter spreads are always better and hence we need to see which pairs are offering better ask-bid spreads. Considering both these factors, sticking with the currency majors may prove to be better and you may like to focus more on EUR/USD, GBP/USD, USD/JPY, and USD/CHF.


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  • London Session (European Session)




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