Forex, or foreign exchange, is one of the largest financial markets in the world, with an average daily trading volume of over $5 trillion. It involves the buying and selling of currencies with the goal of making a profit from the fluctuations in exchange rates. One of the most popular times to trade the Forex market is during the London open, which occurs at 8:00am GMT.
During the London open, there is a significant increase in trading volume as traders from Europe, the Middle East, and Africa come online. This leads to increased volatility and liquidity, making it an ideal time for traders to enter and exit positions. However, not all currency pairs are created equal, and some are better suited for trading during the London open than others.
The most popular currency pairs to trade during the London open are the major pairs, which include the EUR/USD, GBP/USD, USD/JPY, and USD/CHF. These currency pairs have the highest trading volumes, the tightest spreads, and the most liquidity, making them ideal for traders who want to take advantage of the increased volatility during the London open.
The EUR/USD is the most popular currency pair in the Forex market, accounting for approximately 28% of all Forex trades. It is also one of the most liquid currency pairs, with tight spreads and high trading volumes. During the London open, the EUR/USD tends to be the most active currency pair, with large price movements and plenty of trading opportunities.
The GBP/USD is another popular currency pair to trade during the London open, accounting for approximately 14% of all Forex trades. It is known for its volatility and can experience large price movements during the London session. Traders should be aware of any news or events that could affect the value of the GBP, such as Brexit negotiations or economic data releases.
The USD/JPY is a popular currency pair for traders who want to take advantage of the movements in the Japanese yen. During the London session, traders should be aware of any news or events that could affect the value of the yen, such as the Bank of Japan’s monetary policy announcements or economic data releases.
The USD/CHF is another popular currency pair for traders looking to take advantage of the movements in the Swiss franc. During the London session, traders should be aware of any news or events that could affect the value of the franc, such as the Swiss National Bank’s monetary policy announcements or economic data releases.
In addition to the major currency pairs, traders may also consider trading cross currency pairs during the London open. Cross currency pairs are currency pairs that do not involve the US dollar, such as the EUR/GBP, EUR/JPY, and GBP/JPY. These currency pairs can also experience increased volatility during the London session, making them attractive to traders who are looking for trading opportunities.
In conclusion, the London open is one of the most popular times to trade the Forex market, with increased volatility and liquidity. Traders should consider trading the major currency pairs, such as the EUR/USD, GBP/USD, USD/JPY, and USD/CHF, as well as cross currency pairs that can also experience increased volatility during the London session. As always, traders should be aware of any news or events that could affect the value of the currencies they are trading and use proper risk management techniques to protect their capital.
