The London session is one of the best forex sessions in the market as it is at the crossover of the Tokyo and New York sessions. The four currencies, USD, EUR, GBP, and JPY, are the most traded in the world. Thus, it is obvious that the London session creates the most volatility, with higher volume and tighter spreads during the active session. As stated in Babypips, about 43% of all forex trades happen in the London sessions.
Of the four largest forex market sessions, London is undoubtedly one of the most preferred ones amongst the traders. It starts at 7 a.m. to 4 p.m. GMT (3 a.m. to 12 p.m. EST). There are three sections to the London session:
- Pre-London Rush- at the end of the Tokyo session (6:00 a.m.–9:00 a.m.), the market liquidity starts to increase and shape the day’s currency status.
- At 7:00 a.m. to 10:00 a.m., the London session crosses with the Tokyo session. And the market creates a massive surge in volume and volatility during these two hours. As per trade history, this is the best time to trade for day traders.
- Immediately after this period, the volatility reaches its peak at 12:00 p.m. as this is the time when the New York session starts and overlaps with the London session.
- From 2:00 p. m., the market lowers its volatility as by that time, most of the good trades have been taken and spreads have widened.
So, as you can see, the London session is the most volatile market due to two crossovers with the Tokyo and New York sessions. During this time, the most traded currencies are completely at work.
Hence, the best pairs to trade during the London session are, GBP and EUR pairs. You must keep a close eye on all the most traded pairs (eight). But if you want a certain fortune, then trade-in,
- USD/CHF, and
During the London session, the market creates the most volatility with the tightest spread and great volume. Therefore, this session is the best time to trade if you are looking for one.