Forex Trading
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The Forex 3-session Trading System Explained

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Spot Gold and Silver contracts are not subject to regulation under the U.S. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries.

One of the interesting features of the foreign exchange market is that it is open 24 hours a day. Around-the-clock trading allows investors from across the globe to trade during normal business hours, after work, or even in the middle of the night. However, not all times of the day are created equal when it comes to trading forex. It has a high level of liquidity and volume of purchasing and selling. Traders can use their currency pairs at a very low ratio of spreads that is a key factor to trade successfully. In terms of the actual trading strategy, trading during the London market opening hour is no different than trading any other time of the day.

london session forex

If however, the price breaks below the lowest low of the range and price is below the 50 SMA then that’s a signal to take a short trade. The hourly chart has proven to be the best timeframe to use for this strategy since the opportunities exist for just approximately 3 hours. Open and close times will also vary during the months of October/November and March/April as some countries shift to/from daylight savings time . Other than the weekends, there are just two public holidays when the entire forex market is closed, Christmas and New Year’s Day. Before looking at the best times to trade, we must look at what a 24-hour day in the forex world looks like.

And believe us, there will be times when the market is as still as the victims of Medusa. You can make money trading when the market moves up, and you can even make money when the market moves down. Most market activity pacific financial derivatives review will occur when one of these three markets open. Learn more about FX trading with us or open an account to get started. The main reason is all the main economical centers of the London session are found in Europe.

The major Forex currency pairs featuring European and North American currencies are perfect examples. As the strategy looks for low volatility moves that lack momentum, trade any currency which sees its major financial hub sitting outside of Asia. Slava Loza Forex Trader & Analyst Well, a typical trading day is broken up into 4 sessions, each with their own price action characteristics and market flows. If the blue and magenta histograms of the 3cJRSX_H forex indicator break and hover above the 0.00 horizontal level as depicted on Fig. 1.0, the general market sentiment is said to be bullish i.e. a trigger to buy the selected currency pair. The Asian session is the most popular, but that doesn’t mean it’s right for everyone.


If you are a Forex trader who applies breakout trading strategies, it makes perfect sense to look for breakout trades at the opening hours of the London market open. To do so, of course, you need to trade in smaller time frames like the 5-minute or the 15-minute charts. The London session is responsible for around 30% of the trading volume, which is the highest among all major Forex market sessions around the world. Hence, often major trends start and end during the London Forex market hours. It is important to remember that each of the forex session times are approximations as to when trading activity picks up and is influenced by the relative region/session. Globally, forex session times are a general indication not hard fixed times – they are influenced by many factors, including when local business’ open and close.

london session forex

The opening bell is rung on the trading floor of the New York Stock Exchange to signify the start of the day’s trading session. The foreign exchange, or Forex, is a decentralized marketplace for the trading of the world’s currencies. Some of the most active market times will occur when two or more Market Centers are open at the same time. The Forex Market Time Converter will clearly indicate when two or more markets are open by displaying multiple green “Open” indicators in the Status column. It is famous because it provides rewarding pips and helps a trader to jump towards the peak of success.

The Asian Session

These concepts are central to the trader’s approach when speculating in the London Session, as traders can look to use this volatility to their advantage by trading breakouts. When trading breakouts, traders are looking for volatile moves that may continue for an extended period of time. The slower Tokyo market will lead into the London session, and as prices begin to move from liquidity providers based in the United Kingdom, traders can usually see increases in volatility. As there’s no time-based trigger within this session’s trading strategy, instead use the dynamic support/resistance indicator known as Bollinger Bands. Since New Zealand is a major financial center, the forex markets open there on Monday morning, while it is still Sunday in most of the world. Sydney is considered a quiet forex session and provides traders with ample opportunity to place trades either before or after work hours.

Find the approximate amount of currency units to buy or sell so you can control your maximum risk per position. Your stop loss would be placed on the opposite side of the first breakout candle. A short signal will be triggered when you have 2 consecutive candles close outside the lower Bollinger band line.

What currencies to trade in the London session?

And to make matters more complicated, the Sydney session is in the southern hemisphere, so their daylight savings season is opposite to that of London and New York. Major currency pairs greatly reduce in spread due to the session’s high volatility and increased trading. Below is a table of the London session pip ranges of the major currency pairs.

No doubt there is a big list of pairs that you can trade during the London session. You can select a currency pair according to its transaction history of past trades. Each trader wants to trade during that session which provides a high rate of profit. As we discussed earlier, when the market in New York opens, the London trading session has already progressed halfway for the day.

What Is London Session

Taking into account the early activity in financial futures, commodity trading, and the concentration of economic releases, the North American hours unofficially begin at 12 p.m. With a considerable gap between the close of the U.S. markets and the open of Asian trading, a lull in liquidity sets the close of New York trading at 8 p.m. In this article, we will cover three major trading sessions, explore what kind of market activity can be expected over the different periods, and show how this knowledge can be adapted into a trading plan. If you trade according to the table of currency pairs, it may be possible to have a successful trading time period. Additionally, it has no more liquidity than the other currency pairs have.

Here is a table that will show you all possible trading pairs during the London session with the Pip ratio. Trading price gaps on Mondays can be very profitable as most often gaps are filled before the actual trend takes place, be it the continuation of the trend in the direction of the price gap or a complete reversal. 73% of retail investor accounts lose money when trading CFDs with this provider. Just when Asian market participants are starting to close shop, their European counterparts are just beginning their day.

What is Daylight Savings Time in Forex

Don’t get me wrong, there is definitely some action but it tends to be less pronounced than during the other sessions. The forex market is the largest and most active financial market in the world, known for its round-the-clock trading. Discover global FX market hours and when the best time to trade forex is. EUR/USD, USD/CHF, GBP/USD, and USD/JPY are the most traded currency pairs in the forex market during the London session. London session represents one of the most active forex trading times, covering a busy period of the London stock exchange and the most liquid period of the forex trading market. Like the London forex trading session, the New York session and Asian forex session also have unique characteristics that forex traders should be aware of.

Why You Should Trade During Certain Forex Trading Hours

For this reason, a trader needs to be aware of times of market volatility and decide when it is best to minimize this risk based on their trading style. A 24-hour forex market offers a considerable advantage for many institutional and individual traders because it guarantees liquidity and the opportunity to trade at any conceivable time. However, although currencies can be traded anytime, an individual trader can only monitor a position for so long. It’s also important to be aware that high trading activity also leads to high volatility.

That,s why, if you are a new trader and can’t face the risk, it is the best choice for you. In comparison to other brokers in the forex market, this pair has a low ratio of spreads that is a very attractive offer for traders. Such pairs have also a tight spread that makes them superior to other currency pairs. The London session in Forex trading is also introduced as a European trading session.