Forex trading, also known as foreign exchange trading, is a market where currencies from different countries are bought and sold. The forex market is open 24 hours a day, five days a week, which means that trading can take place at any time of the day or night. However, there are certain times when the market is more active than others, and this is when traders tend to make the most profit.
One of the most important sessions in forex trading is the London session, which is also known as the European session. This is because the London session is when the largest volume of forex transactions takes place, and this can have a significant impact on the value of currencies.
So when does the London session begin? The London session starts at 8:00 AM GMT and ends at 4:00 PM GMT. This means that the London session overlaps with the Asian session and the New York session, which creates a lot of trading opportunities.
During the London session, the most active currencies are the British pound (GBP), the euro (EUR), and the Swiss franc (CHF). This is because London is the financial hub of Europe, and many of the major banks and financial institutions are located in the city.
One of the reasons why the London session is so important is because it is the time when economic data is released from the eurozone and the UK. This data can have a significant impact on the value of these currencies, and traders who are able to predict the outcome of these releases can make a lot of money.
For example, if the European Central Bank (ECB) announces that it will be raising interest rates, this will cause the euro to increase in value. Similarly, if the Bank of England (BOE) announces that it will be cutting interest rates, this will cause the pound to decrease in value.
During the London session, there are also a lot of news releases from the UK and the eurozone that can impact the forex market. These include GDP data, inflation data, employment data, and retail sales data. Traders who are able to interpret this data and make informed trades can make a lot of profit.
Another reason why the London session is so important is because it is the time when the most liquidity is available in the forex market. This means that there are a lot of buyers and sellers in the market, and this can create a lot of volatility. Traders who are able to take advantage of this volatility can make a lot of profit.
One of the best things about the London session is that it is a very convenient time for traders who live in Europe. This is because the session starts at 8:00 AM GMT, which is a reasonable time for traders to wake up and start trading. Traders who live in other parts of the world, such as Asia and the Americas, may find it more difficult to trade during the London session due to the time difference.
In conclusion, the London session is one of the most important sessions in forex trading. It is the time when the most volume of forex transactions takes place, and it is also the time when economic data is released from the eurozone and the UK. Traders who are able to interpret this data and make informed trades can make a lot of profit. The London session is a convenient time for traders who live in Europe, and it is also a time of high liquidity and volatility.
