London Trading Session

London, England has long been the world’s financial capital. Before the United States took over as the market of choice for most exchanges, London was the center for finance, insurance, banking and to this day, it is still a leader in many financial service businesses.

Being “in the middle” of the Asian trading session and the American trading session gives London a big advantage in being the number one market for currency trading.

6 Things You Need to Know about London:

1. The London market is typically the most volatile market due to the fact that it follows the Asian trading session and opens into the American trading session.
2. The London market is the most liquid session for all European denominated pairs, with GBPUSD and EURUSD being the most active currency pairs.
3. Because many European banks are headquartered in London, there are fewer trades placed, but it is common for these less frequent trades to be larger in size. This market phenomenon often inspires technical traders to flock to the London trading session to ride the waves. Pattern traders rejoice; there is plenty of money to be made. (We’ll get to patterns in our technical analysis tutorials!)
4. The session is least active in the middle, when traders have taken their lunch. Also, since London follows Asia and leads into the American session, there are two overlaps in trading at the beginning and end of the day. The middle part of the session, then, is made up of only European traders, most of who are away from the markets for a brief timeout.
5. London is unique in that the European Central Bank (the bank that manages the Euro) can affect the session tremendously. Many different nations are involved in European monetary policy—and they don’t always agree. When push comes to shove, the international politics definitely create ripples in the forex market.
6. The London session is the only trading time that harbors a very important global currency officially used by multiple nations. The Euro