London Forex Pairs – Liquid Majors

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The moment Asian trade markets close, the European counterparts start their trade journey! Despite numerous financial centres all over Europe, traders and investors pay greater attention to London as the centre of attraction.

As a result of its strategic location, London has become the world’s favourite centre for trade. London forex pairs are the destination of more than 42% of all forex transactions, which is surprising. This session is also known as “European” trading.

Overview about London forex trade session

The London session is considered one of the key financial centres where the most forex transactions are conducted. As a result, higher liquidity and perhaps a lower transaction cost, such as a lower pip spread.

There have been many transactions worldwide, but the London session is still considered the most volatile. The New York session starts with most of the trends, and the London session concludes with it.

Volatility will die down in the middle of the session if the trade shop closes down for a lunch break. Trends can sometimes reverse at the end of the London session because the European traders might lock the profits.

What are the timings to trade in the London Forex Market?

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The London forex session starts functioning from 3:00.AM Eastern Time and ends at 12:00 PM Eastern Time.

This forex market session often experiences a higher forex volume out of different forex markets currently running.

What are London forex pairs available in London forex?

Based on transaction volume in the London session, you will experience a lot of liquidity during your trading journey. Due to this high liquidity, you can trade on almost any currency pair.

As a beginner trader, you should always try to trade with major currency pairs. This includes USD/JPY, GBP/USD, EUR/USD, and USD/CHF. This is because all these major currency pairs have the tightest spreads.

All the pairs discussed above are directly influenced by the news trading reports revealed during the European session.

You can also choose yen crosses such as GBP/JPY and EUR/JPY because they are volatile during the session. As these are the cross currency pairs, the spreads are a bit wider than other pairs.

Table of London session pip ranges of major currency pairs

Below is the table of London session pip ranges of few major currency pairs to trade on:

Currency Pair London pip range
EUR/USD 83
GBP/USD 82
USD/JPY 36
AUD/USD 60
NZD/USD 64
USD/CAD 66
USD/CHF 58
EUR/JPY 80
GBP/JPY 102
AUD/JPY 86
EUR/GBP 40
EUR/CHF 30

A trader can calculate the pip values by using the past data average.

Note: These are not absolute values, and they can vary based on liquidity and market conditions.

Three things you should know about the London forex market

Higher liquidity

The London forex market is known to be the most significant liquid trading session in the forex market. Trade can occur even at the low spread with a constant high volume of selling and buying currency pairs.

Day or small traders can even capitalise on the short move by looking for some trends. Breakouts for short-term trading can often be selected for reducing the cost incurred in the spreads.

Pay attention to the overlap

Overlap is one such condition in which the US forex session and London forex session overlap. This will occur from 8:00—Am European Time to almost 12:00 PM European Time.

During these four hours, few major trade markets will participate in London forex, after which volatility will eventually increase. Once the volatility is increased, specific fast and big moves are noticed in the trading market.

In short, volatility is at its peak when both markets overlap. To take benefit of this massive volatility, traders can often use the breakout strategy and perform maximum trading.

London forex session is active and speedy

Another element many of us do not know about the London forex session is speedy and active. As soon as the price shifts from the liquidity providers, a trader will witness increased volatility.

As the price starts from London, few major currency pairs will appear in the hourly move. So this becomes convenient to crack the resistance and support in the Asian forex session in which volatility is relatively low.

To enjoy trading for an extended period, traders should look for more volatile trading moves.

Trading breakouts in London forex session

Trading with breakouts in the London forex session is similar to the trading you perform in other forex market sessions. The only difference is that the London forex session will allow you to experience high liquidity and volatility from the beginning.

When it comes to trade breakouts, a trader should pay attention to resistance and support levels for plotting successful trades.

In addition, traders should keep the close stops and place them in sync with the prevalent trend line. This will reduce the chances of facing any sort of big loss. Thus, even though the support or trend line is broken, the chances of incurring the loss are limited!

By holding the strategy firmly, a trader will experience a favourable ratio of reward and risk. Moreover, with increased liquidity and volatility, the opportunity of using the breakout strategies becomes more profitable.

Tips & strategies to follow during trade

  1. To earn maximum profits from the London forex market, a trader should have extensive knowledge about the foreign exchange market.
  2. Suitable leverage should be applied during trading to capitalise on the liquidity and volatility of London forex sessions.
  3. Keep yourself familiar and updated with the London forex session and New York forex session characters.

Bottom line

To earn massive profit out of London forex trading, it is essential to be well-versed in the functioning of the trade and foreign exchange market. Therefore, suitable leverages are applied to capitalise on liquidity and volatility of the London forex session.

In short, within, London forex session, a trader will experience more options of using the breakouts in the entire session. So keep a close eye on the increased liquidity and volatility of the London trading session.

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