When Trading Forex, Lesson 3: London Session

While the Asian market participants started to deal with their stuff and close the European market, just started their activity. Although there are several financial centres in Europe, but the view of market participants will be fixed on London.

According to history, London has long been a center of trade in Europe. All thanks to the strategic location. So, it is not surprising if the country still maintain the system of monarchy is considered the capital of Forex in the world, with thousands of businesses making transactions every minute of it. Alleged 30% of all Forex transactions occur at the London session.

Below is a chart of the currency pair pip range major on the London sessions:

Pair	London
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	-

Pip value on the table above based on a calculation using the data in 2012. And remember, if the value of the pip was never fixed. Pip value depends on the liquidity and market conditions. Unless the value of EUR/CHF, of course, that does not change from a range of 1.2000.

Here are the facts regarding the European session:

1. Because the London session across two other major trading sessions, plus the fact that London is a major financial centre in the world, many large-scale Forex transactions occur at this session. Resulting in high liquidity and low transaction costs (especially the pip spread).
2. In addition, a large number of transactions at this session also put London as the most volatile trading session.
3. Most of the trend began at the London session, and they will generally continue until the New York session.
4. The volatility of the London sessions tend to end up in the middle of the session, as traders chose to fill stomachs and gather energy, New york before the session begins.
5. At the end of the session many European traders London locked their profit and cause a trend sometimes turns.

Pair Which Should We Use?
The magnitude of the volume of transactions that occur on the London session, resulting in a large number of liquidity during the European session, so that we can use any pair.

But to be safe, it is better we use pair-pair mayor: EUR/USD, GBP/USD, USD/JPY, and USD/CHF. Because only the pair that has spread most stringent. And only those who will be directly affected by any news that appears in the European session.

Or, if you want a little variety, we can use the Yen Japan and "gave him" with European currencies (for example the EUR/JPY and GBP/JPY), because the currency is quite volatile at this session. However, the disadvantage is, since we're using cross pairs, spread that appears to be quite wide.

Yup! Next let assault New York session!