London Session Time in South Africa
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Due to many transactions, London session time in South Africa tends to be the most volatile. 35% of global forex turnover is generated during the London trading session, the highest amount among traders.
The Forex market is different from other assets because of its unique structure. For example, equity markets open and close at precise times. For example, the Johannesburg Stock Exchange (JSE) is open Monday through Friday between 9 am and 5 pm South African Standard Time (GMT +02:00).
This article will determine whether trading with London session time is the best to trade in South Africa.
What is London Session Time?
The trading session is held from 07:00 – 16:00 GMT (Greenwich Mean Time), which corresponds to the official business hours in London.
Since London is the financial trading capital of Europe, the London session is sometimes referred to as the European session.
Overview of the Forex trading times
The Forex market doesn’t have an “official” open and close time in every country because it’s available 24/7 from Monday to Friday.
All traders, regardless of country, close their accounts on Friday at 17:00 EST and open their accounts on Monday in Wellington, which means 22:00 EST on Sunday. These five days are the Forex market hours or Forex trading times. It simply denotes when traders can open/close positions and speculate on the price movements of foreign currency pairs.
Forex trading can be divided into three sessions representing the main money centers: Asia, Europe, and North America. Depending on the objectives and goals of the market participants active at various times, each “center” has its own “personality.”
In the Asian session (which includes Wellington, Sydney, Tokyo, Hong Kong, Singapore, and mainland China), liquidity is the poorest. However, due to the close links between the economies, there is no desire to spark volatility.
As Frankfurt starts to trade, liquidity picks up, but more so when London opens. Because of the historical importance of various financial hubs on the continent (Paris, Geneva, Frankfurt, and Milan) and in the United Kingdom (London), liquidity is much deeper in Europe.
In the end, North America comes online after the Asian and European markets open, and it has the largest pool of liquidity. In addition, the Canadian and Latin American markets are also added to the liquidity pool, which means significant funds can handle less slippage.
Impact of Daylight Savings Time (DST)
Trading Forex is possible 24 hours a day, five days a week, but there is a detail you should not ignore. Whenever rollover time occurs (5 pm NY time), you will not be able to make any trades for a short period (the length of this period will vary depending on your broker).
A more important fact to remember is that spreads on different currency pairs can be more comprehensive than usually close to rollover time.
Using a tight stop loss can be risky and impractical to place trades close to rollover time. Traders might consider waiting 30 minutes before rolling over or trading after rolling over as a safety precaution. The volatility is so low during those times anyway that waiting 30 minutes shouldn’t make a meaningful difference.
Let’s detour and talk about Daylight Savings as we discuss the rollover hour. The southern hemisphere’s winter session closes at midnight (00:00) in South Africa, while the northern hemisphere’s session closes at 17:00 Eastern Standard Time (EST). In summer, the Northern Hemisphere’s session closes at 17:00 EDT, while the Southern Hemisphere’s session ends at 23:00.
Therefore, the Forex market in South Africa is open and closed at 23:00 (between March and November) and 00:00 (between October and March). Since volatility is lower and spreads are higher during those times, traders should generally avoid trading them. However, as long as you keep these adjustments in mind, you can still trade Forex during those times.
When does the London Forex market open?
The London forex market hourly session runs from 3:00 am ET to midnight ET. As a result, the London forex market session has the highest volume of all forex trading sessions.
Best Forex pairs for London session
EUR and GBP pairs will be the best forex pairs to trade in the London session. Among these are:
Due to their high volume, these pairs are the best to trade. As you can see in the chart above, there was a massive change in price action for the day when the London markets opened at 07:00. It is even possible to profit from this during pre-London hours, as the price will generally move toward the open price.
You can also trade USD pairs such as USDJPY, USDCAD, AUDUSD, and XAUUSD during the last 4 hours of the London session. However, if possible, stay away from AUD and NZD pairs during the London session. Because volume will be lower, spreads may be higher, opportunities may be harder to find, and the market will probably move slower, causing price action to be unpredictable.
When to trade London Forex session?
Forex trading London session time begins at 7:00 UK time. Around 06:00 UK Time, there is a pre-London rush, when opportunities start to form for the day, and currency pairs start to move into favourable positions for liquidity and great prices.
During the first few hours, from about 07:00 to about 10:00, there will be an immense volume rush as the bell goes and currencies start flying.
The volume will decrease, and the markets will prepare for the opening in New York between 10:00 and 12:00 UK Time. However, a massive spike in trading volume follows the beginning of the US markets at midnight, bringing the London session to life once again.
At 16:00, the London session comes to an end. It isn’t worth staying in the markets by this time since most of the excellent trading opportunities have been taken. This is a perfect time for intraday traders to liquidate and finish their cash for the day.
Top 3 things you need to know about the London trading session
Here are a few things that the traders should consider about this time session.
London’s session is fast and active.
Traders can usually see increased volatility after the slower Tokyo session leads into the London session when prices move from liquidity providers based in the United Kingdom.
Many major currency pairs will see an increase in the average hourly move when prices arrive from London.
It may be much easier to break support and resistance during the Asian session (because volatility is usually lower).
Traders can trade breakouts based on these concepts during the London Sessions to take advantage of this volatility. However, to trade breakouts successfully, traders must find moves that are likely to continue for a long time.
Take note of overlaps.
“Overlap” refers to when the London and US sessions overlap (8 am ET to 12 pm ET). These are two of the world’s two largest markets, and an abundance of liquidity enters the market during this overlap period, which causes large and fast movements.
When the London and New York forex sessions overlap, volatility peaks from 8:00 am to 12:00 pm ET. Traders can take advantage of the increased volatility seen during the overlap to trade the overlap by using a breakout strategy.
London’s forex session is one of the most liquid in the world. Major currency pairs can trade at extremely low spreads due to the high buying and selling volume. If day traders are looking for ways to reduce their spread costs, they may find ways to trade trends and breakouts.
When is the best time to trade Forex in South Africa?
Although you may feel confused, why would you need to know markets’ opening and closing hours in different countries if you live in South Africa? The reason is simple. It is best to trade Forex when the market is most active, regardless of where you are in the world.
Due to the main trading centers in Europe, the US, and Asia, the best time to trade would be when the markets are open in any of these three regions. However, there are better hours to change. Market hours of the leading trading centers overlap at some point if you examine them closely.
The most significant overlap between the United States and London is between 2:00 pm and 7:00 pm (SAST). More than 70 percent of the trades succeeded because the USD and EUR were the most popular currencies to work.
If you are trading with the EUR/JPY currency pair in Sydney/Tokyo, the best time to change is 8:00 am – 10:00 am (SAST). Although the volatility is not as high as the overlap between the US and London, traders can still capitalise when the market fluctuates. In South Africa, it may be best to trade USD/JPY during this time slot.
The third overlap is London/Tokyo – 9:00 am – 10:00 am (SAST) – Although this overlap is not as good as the other two, it still offers the highest profitability margin.
The best time to trade Forex is when London and the US sessions overlap in South Africa and around the world. Since it has the most participants, this is the time when the market is most liquid. Furthermore, these are the most volatile and fairest trading periods for price movements.
For traders of EUR and USD, it is the most liquid time, but it is also the most liquid time for traders of other currencies. It is commonly believed that currencies trade the most in their local time zones. Therefore, if you are selling ZAR, you may assume that the best time is whenever the market in South Africa opens. However, the overlap between New York and London is one of the best times to trade Forex in South Africa with any currency pair.
Tips and strategies for London session trading
Be careful and utilise the appropriate leverage when trading the London open because volatility and liquidity rise. Get to grips with the basics of Forex trading by downloading our Forex for beginners trading guide.
A forex trader should be aware of the unique characteristics of the New York session and the Asian forex session, just as they do with the London session.
Here are some essential tips:
- Volatility and liquidity increased during the London session.
- Breakouts may be more frequent during the London session.
- Remember to keep an eye out for increased volatility and liquidity in the overlap between the London and New York sessions.
Is The London Session Worth Trading?
Most profitable forex traders execute positions during the London session, and it is a unique trading session. Lots of buying and selling goes on, with a high volume. In essence, this means that your spreads will be much smaller, that there will be minor consolidation, and that there will be more opportunities for you to take advantage of.
The volume and opportunities in the London session make it worth trading compared to the Asian session or even the New York session.
South Africa is an excellent place to trade Forex since the best trading times are 10:00 and 19:00 SAST. Thus, trading Forex from South Africa is more accessible than the United States! In the US, some traders need to wake up at 3 am to trade Forex during the European session – this is not a convenient time.
London and early US sessions are usually the best times for market liquidity, volatility, and trading. This is because the essential central banks, large speculators, global corporations, financial institutions, commodities markets, and stock markets are increasingly active, influencing currency markets in a significant way.
It is pretty comfortable to trade Forex in South Africa during the best hours, so motivated traders should take advantage of this.
Jason Morgan is an experienced forex analyst and writer with a deep understanding of the financial markets. With over 13+ years of industry experience, he has honed his skills in analyzing and forecasting currency movements, providing valuable insights to traders and investors.
Forex Content Writer | Market Analyst