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Guide for Trading “London Session”

The London forex market is open from 3:30 a.m. to 12:00 p.m. ET. It accounts for approximately 35% of total average forex turnover*, the highest proportion among its peers. Throughout the year, the London forex session overlaps with the New York session. 

The London forex market session has the highest volume of any forex market session.

Characteristics of London Trading Session 

Fast and active

The slower Tokyo market will lead into the London session, and traders can usually expect increased volatility as prices begin to move from liquidity providers based in the United Kingdom. 

As prices begin to arrive from London, the ‘average hourly move’ on many major currency pairs will frequently rise. 

Support and resistance may be much more easily broken than during the Asian session (when volatility is usually lower). 

These ideas are fundamental to the dealer’s methodology while guessing in the London Session, as brokers can hope to exploit the unpredictability by exchanging breakouts. While exchanging breakouts, merchants are searching for unpredictable moves that might keep going for quite a while.

Look out for the overlap 

The ‘overlap’ occurs when the London and US sessions literally overlap (8AM ET to 12PM ET). These are the world’s two largest market centres, and large and fast moves can be seen during the four-hour overlap as a large amount of liquidity enters the market. 

As shown in the image above, volatility peaks between 8:00 AM and 12:00 PM ET, when the London forex session overlaps with the New York forex session. To trade the overlap, traders can employ a break-out strategy that capitalises on the increased volatility observed during the overlap.

High liquidity

One of the most liquid trading sessions is the London forex session. Major currency pairs can trade at extremely low spreads due to the high volume of buying and selling. Day traders looking for short-term moves may be interested in finding trends and breakouts to trade in order to reduce the cost of spreads.

CURRENCY PAIRS TO TRADE 

Among these currencies are major currency pairs such as EUR/USD, USD/JPY, GBP/USD, and USD/CHF. During the London forex session, the major currency pairs trade in extremely high volumes. 

Due to interbank exercises between the United States and Europe/London, money matches most impacted by the cross-over incorporate the EUR/USD, USD/JPY, and GBP/USD.

In the event that your exchanging technique favors unpredictability, these are the exchanging matches to watch out for on the grounds that they will be overwhelmed with liquidity and will move more on normal during the cross-over.

There are no ‘best’ money matches to exchange during London forex market hours, yet there are cash matches that will lessen spreads because of high volume, permitting dealers to exchange at lower spreads.

Trading breakouts during the London session with a London breakout strategy is similar to trading breakouts at any other time of day, with the exception that traders can expect a flood of liquidity and volatility at the open. 

When traders look for breakouts, they are frequently looking for strong support or resistance to plot their trades. 

The main advantage of this setup is risk management. Traders can keep their stops close to the trend line and relatively tight. If the help/pattern line is broken, misfortunes are restricted, and the gamble reward proportion might be positive in the event that the technique is effective.

The increase in liquidity during the London session, combined with the increase in volatility, increases the likelihood of potential breakouts.

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