London Session
The London trading session is the most important session for many retail traders, especially in forex. Liquidity typically rises sharply when Europe opens, and markets often make their most meaningful moves of the day.
In plain English: "London is when the market often wakes up—spreads tighten and price moves more."
What Is the London Trading Session?
Traders divide the 24-hour market into sessions based on when major financial centres are active. The London session is the period when the UK and Europe are most active and when institutional flow increases materially.
- Often the highest-liquidity part of the FX day
- Major driver of price discovery for EUR and GBP pairs
- Frequently sets the directional tone before New York joins
Why London matters
Higher liquidity often means tighter spreads and potentially better fills. It also means price can travel further—good for opportunities, but also higher risk if you oversize.
Typical London Session Times (UK Time)
London session hours are naturally aligned with UK business hours. As a practical guide:
- Morning to late afternoon (UK), with the most watched period around the London open
⚠️ Practical tip
Don't rely only on the clock. Liquidity can surge at the open, then shift again during the London–New York overlap. Use spreads and volatility readings to confirm current conditions.
Liquidity and Volatility in the London Session
Compared to the Asian session, London typically brings:
- Higher liquidity: more participants and deeper order books
- Tighter spreads: often (especially on major pairs)
- More volatility: bigger candles and more frequent breakouts
Common pattern
London often breaks the Asia range. Traders frequently mark Asia highs/lows and watch if London drives a breakout or a fake-out.
⚠️ London open can be chaotic
The first hour can feature sharp moves, quick reversals, and spread behaviour that changes rapidly. Trade smaller if you are learning the open.
What Tends to Move During London Hours?
London is a global FX hub, so many major pairs are active. Particularly relevant instruments include:
- EUR and GBP majors: EUR/USD, GBP/USD
- European crosses: EUR/GBP, EUR/CHF, GBP/JPY
- Indices and commodities can also become more active as European venues open (instrument dependent)
⚠️ News sensitivity
European economic releases and central bank communication can drive large moves during London. Always know the day's calendar.
How to Trade the London Session
Common approaches that traders use in London hours:
- Asia range breakout: trade a break of Asia high/low with a clear plan for false breaks
- Trend continuation: if a trend is already established from prior sessions, London can extend it
- News-driven moves: trade only if you understand the risk of volatility, slippage, and spread changes
- Liquidity-based timing: focus on the open and overlap windows rather than the entire day
✅ Beginner-friendly rules
- Start with liquid pairs (EUR/USD, GBP/USD) to reduce costs
- Trade smaller at the open until you understand the volatility
- Use fewer trades with higher quality setups rather than constant activity
- Plan the day: key levels + calendar + max risk per trade
⚠️ Execution note
Even in London, fast moves can slip stops. If you rely on tight stops, you may be vulnerable around news and the open.
Common Misconceptions
- "London is the best session for everyone."
It's active, but not always ideal for every strategy or schedule. - "Tighter spreads mean lower risk."
London can move quickly; volatility is a risk factor too. - "More volatility means easy profits."
It also means faster losses without discipline.
✅ Quick Checkpoint
Try answering before expanding the model answers.
1) Why is the London session important in forex?
Liquidity increases significantly as Europe opens, often tightening spreads and increasing volatility and price discovery.
2) What is the "Asia range breakout" idea?
Mark the high/low formed during Asia and watch whether London breaks out beyond it, potentially starting a larger move.
3) Name two pairs commonly traded in London hours.
Examples: EUR/USD, GBP/USD, EUR/GBP, GBP/JPY.
Frequently Asked Questions
Is London always the most liquid session?
In forex, London is often the most liquid overall. Liquidity is even higher during the London–New York overlap. Exact conditions depend on the instrument and the day's news.
Why does the London open sometimes "fake out"?
The open can include position adjustments and liquidity seeking. Price may push beyond a level then reverse once liquidity deepens and the market finds a clearer direction.
Should beginners trade the first hour of London?
Many beginners benefit from watching the open first and trading later once structure forms. If you do trade it, reduce position size and keep risk tight.
What is the best way to prepare for London?
Mark key levels (prior highs/lows, Asia range), review the economic calendar, and decide your maximum risk before the session starts.
Summary
The London session is a major driver of forex liquidity and volatility. Spreads often tighten and price action becomes more active, which can create opportunities—but also increases the cost of mistakes. Use liquid pairs, plan around key levels and news, and manage risk especially around the open.