Understanding the European Session in Forex

The European session in the Forex market is one of the three major sessions alongside the North American session and the Asia Pacific session. The European session in Forex is commonly referred to in the trading business as the London session while the other two sessions have been coined the New York session and the Tokyo session. The simultaneous existence of all three session contribute towards the constant activity involved in the foreign currency market. While one market may be closed, there is another session opening up for activity.

Before the Asia Pacific session closes, the European session in Forex opens up and maintains the trading activity. While there are some major European players involved in the session, there is an understanding that the European session in Forex operates primarily between the hours of seven in the morning (GMT) until four in the afternoon (GMT).

The major currencies of the European session in Forex  consist of the Euro, the British Pound, and the Swiss Franc. Some of the most common currency pairs in the European session is the US Dollar with the Euro as well as the US Dollar with the British Pound. Currencies most often experience price volatility unsurprisingly when their own market is open. In other words, while the European session in Forex is open then is the time that the Euro, Swiss Franc and British Pound experience the most price activity and resulting volatility. The fact that London is closely linked with North American currencies and Asia Pacific currencies further contributes to the common price volatility.

The most experienced traders know that one of the key aspects of Forex trading in a successful manner is to learn the importance of timing. Since the Forex sessions are always active in at least one part of the world, there are some times in which it is more profitable or there are more pips probable. The most productive timing in trading is when the European session in Forex is preparing to close and overlaps with the opening of the North American session. Traders who have been actively following the European session in Forex soon realize that this overlapping time is ideal for trading with maximum profits. Unsurprisingly, this overlapping time period is lovingly known as the “hot zone”. The four hours that demands the most attention of traders is well worth the effort.



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