Forex currency trading guides for beginners - The London trading session.
The London trading session - An overview
As Tokyo prepares to go to bed, the London session starts. Though many financial centers are spread all across Europe, market players pay particular attenion to London.
Traditionally, London has always been referred to as the forex capital of the world. This is due mainly to it's centralized location. Just over 30% of all forex trading volume occur during the London trading session.
As a forex beginner, know the following facts about the London trading session:
There is higher liquidity during the London trading session. This is due to the fact that this session transcends two trading sessions. This leads to a large volume of trade being conducted during this session.
Because of the big trading volume during this session, it is usually the most volatile among the four sessions.
The volatile nature of the market tends to cool down in the middle of the session when traders go for lunch and wait for the start of the New York session.
Trends that develop in the day may be reversed close to the end of the session as traders tend to take profits.
Due to the large volume of trade and high liquidity of the market, any currency pair can be traded during this session.
You may however be advised to go with the majors. They usually have tight spreads and are the currencies most likely to be directly affected by economic news and data that come out during that session.
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