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. It’s no wonder that it is considered the
forex capital of the world with thousands of businessmen making transactions
every single minute. About 30% of all forex transactions happen during the
London session.
Below is a table of the London session pip ranges of the major
currency pairs.
|
Pair
|
London
|
|
EUR/USD
|
83
|
|
GBP/USD
|
82
|
|
USD/JPY
|
36
|
|
AUD/USD
|
60
|
|
NZD/USD
|
64
|
|
USD/CAD
|
66
|
|
USD/CHF
|
58
|
|
EUR/JPY
|
80
|
|
GBP/JPY
|
102
|
|
AUD/JPY
|
86
|
|
EUR/GBP
|
40
|
|
EUR/CHF
|
–
|
These pip values were calculated using averages of past data
from the month of May 2012. 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 European session:
§ 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 amount 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.
Which Pairs Should You Trade?
Because of the volume of transactions that take place, there is
so much liquidity during the European session that almost any pair can be
traded.
Of course, it may be best to stick with the majors (EUR/USD, GBP/USD, USD/JPY, and USD/CHF), as these normally have
the tightest spreads.
Also, it is these pairs that are normally directly influenced by
any news reports that come out during the European session.
You can also try the yen crosses (more specifically, EUR/JPY and
GBP/JPY), as these tend to be pretty volatile at this time. Because these are
cross pairs, the spreads might be a little wider though.
Next up, we have the New York session, a jungle where dreams are
made of. Hey, isn’t that an Alicia Keys song?
#Forex #Trading #Tradewithus
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