Forex trading is a global market that is open 24 hours a day, five days a week. However, the London trading session is one of the most active and important trading sessions in the forex market. The London trading session is also known as the European trading session, as it is the time when the major financial centers in Europe start their trading day. In this article, we will discuss when the London trades on forex trading and why it is important for traders.
The London trading session starts at 8:00 AM GMT and ends at 4:00 PM GMT. During this time, the markets in London, Zurich, Frankfurt, and Paris are open. The London trading session is the second-largest trading session in the forex market, accounting for about 35% of the total trading volume. The New York trading session is the largest trading session, accounting for about 40% of the total trading volume.
The London trading session is important for several reasons. First, it overlaps with the Asian trading session and the New York trading session. This means that there is a high level of trading activity during this time, and there is a lot of liquidity in the market. This makes it easier for traders to buy and sell currencies, and it also means that there are more opportunities for traders to make profits.
Second, many major economic indicators are released during the London trading session. These include the European Central Bank (ECB) interest rate decision, the Bank of England (BOE) interest rate decision, and the European Union (EU) Gross Domestic Product (GDP) data. These economic indicators can have a significant impact on the forex market, and traders need to be aware of them to make informed trading decisions.
Third, the London trading session is the time when many major banks and financial institutions start their trading day. These institutions are responsible for a significant portion of the trading volume in the forex market, and their actions can have a significant impact on currency prices. By understanding the behavior of these institutions, traders can make more informed trading decisions.
Finally, the London trading session is the time when the major currency pairs, such as EUR/USD, GBP/USD, and USD/JPY, are most active. These currency pairs are the most heavily traded in the forex market, and they offer the most liquidity and trading opportunities. By trading during the London trading session, traders can take advantage of these opportunities and make profits.
In conclusion, the London trading session is an important time for forex traders. It is a time of high trading activity, significant economic indicators, major financial institutions, and active currency pairs. By understanding when the London trades on forex trading and the factors that affect it, traders can make more informed trading decisions and increase their chances of success in the forex market.
