Forex European Session Trading Strategy fxtm Forex

European Time (London): 2:00 am to 12:00 noon EST

London is the largest and most important foreign exchange trading center in the world, with a market share of over 30% (according to the Bank for International Settlements report). Many large banks have their trading offices located here, and the high level of liquidity and efficiency allows most major foreign exchange transactions to be completed within London time. The large number of market participants and the large volume of transactions make London the most activeforeign exchange marketThe data shows that in half of the 12 major currency pairs, the volatility exceeds 80 points (the benchmark we use to judge the activity of currency pairs), with the volatility of GBP/JPY and GBP/CHF even reaching 140 points and 146 points respectively.

GBP/JPY and GBP/CHF are more suitable for active traders. The average daily volatility of these two currency pairs exceeds 140 points, which can generate considerable gains in a short period of time. Its high volatility reflects the peak of intraday trading, and the world's large institutions are completing currency conversion cycles. The London session is directly connected to the US session and the Asian session; large banks and institutional investors will convert European assets into US dollars before the US market opens after completing their portfolio reallocation. The London session combines two conversion processes by large players, which is the main reason for the sharp fluctuations in currency pairs.

For traders with a strong risk tolerance, there are also a variety of currency pairs to choose from. EUR/USD, USD/CAD, GBP/USD and USD/CHF have average volatility of around 100 points, and their high volatility also provides ample entry opportunities, all of which are ideal. As mentioned earlier, European currencies are again active in trading against the US dollar due to large players having to restructure their portfolios before the US market opens.

For the more prudent participants, the average volatility of the NZD/USD, AUD/USD, EUR/CHF and AUD/JPY is about 50 points. These currency pairs have high interest income in addition to potential trading gains. They also allow traders to determine the direction based on fundamental economic factors, reducing the uncertainty caused by intraday speculative trading. It is worth noting that the use offxtmUsers of foreign exchange platforms can also develop personal strategies based on these characteristics.