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What Time Does the London Forex Market Open?

The question is: what time does the London forex market open?

The short answer is: the forex market is open 24 hours a day, five days a week. That is the benefit of trading forex. If you want to trade during the night or after work, you are free to do so.

The catch is: not all trading hours are created equal.

Regardless of what time you trade, something will be moving…

There are plenty of times during the day that are consistently volatile. Mind you, volatile times are when you make the most money.

One of these times is the opening bell in London.

This article will discuss when it happens, why it matters, and how to make the most money out of the London session.

What time does the London forex market open?

If you’re wondering what time does the London forex market open, the answer is simple: 7:00am GMT. The forex open is followed by the FTSE and London Stock Exchange, which both open at 8:00am GMT.

Regardless of whether you plan to trade it, the opening of the London forex market is an important time to be aware of…

London is the world’s largest forex market and accounts for 43% of the trade volume. Indeed, London’s trading volume is greater than that of New York and Tokyo combined!

When you hear the terms ‘London session’ and ‘European session’, don’t get confused. These terms mean the same thing and are used interchangeably. So, this means the answer to ‘What time does the London forex market open?’ could mean the European forex market as well.

Why you might trade the London session…

The main attraction of the London session is the sheer number of transactions.

Remember, London is the world’s biggest forex market. That’s because its opening hours overlap with the opening hours of both Tokyo and New York. It’s also the financial capital of Europe and, believe it or not, the world.

The benefit of having the most volume is higher liquidity and, usually, that means lower spreads.

It also makes the London session notoriously volatile.

Pro tip: these factors make trading the London open advantageous for forex traders.

What time does the London forex market open: Trading the British pound

Naturally, a popular currency to trade during the London session is the British pound.

The British pound is the fourth most traded currency in the world. It’s behind only the US dollar, the euro and the Japanese yen.

It also forms one side of many different currency pairs. The most actively traded currency pairs with the British pound are:

  • GBP/USD
  • GBP/CHF
  • GBP/JPY
  • EUR/GBP

Factors that influence the British pound

The British pound is typically most active during the first and last 30 minutes of the London stock market trading day.

When looking for price catalysts, it’s important to consider both UK and international news, as the British pound is equally affected by both.

Most UK economic data is released between 7:00am and 8:30am GMT. So if you want to trade the news, you will focus your attention on these hours. Note: the best times to trade the British pound are typically one hour before and up to three hours after these releases.

Why?

Before the news, forex traders typically speculate on the result.

After the news, forex traders need to battle it out and decide on a price direction. That can take up to three hours.

But not always!

If you also want to trade US news, most US economic data is released between 1:30pm and 3:00pm GMT. This can also be a good time to trade the pound. But, if you want to just trade the London session, no worries.

What other pairs should you trade?

There’s so much liquidity that just about any pair of currencies can be traded comfortably during the London session.

If you want the tightest spreads, you should stick to the majors. These include the EUR/USD, GBP/USD, USD/JPY and USD/CHF.

Or, if you want the highest volatility, you might choose to trade the GBP/JPY, EUR/JPY or GBP/USD.

What to expect during the London session…

Remember, the most activity happens when the forex market opens in London. But most forex trends start during the London session and continue until around the New York open.

Volatility tends to drop during the middle of the London session, as traders wait to see how New York will react. That’s why most traders choose to only trade the open or close of the London session…or the open of the New York session.

That’s no joke.

Sometimes a trend will reverse towards the end of the London session. Some forex traders choose to close out their positions and go do something else. They return to their desks for the start of the New York open.

That said, naturally, the London session is heavily influenced by European news. So, check out the economic calendar for major news in Europe. You might find some important news that creates trading opportunities in the forex markets.

Should you trade the open?

But the question is: should you trade the London forex open?

It’s highly contested.

Some forex traders consider it the easiest time of day to make money in forex. Others actively avoid it. Some forex traders refuse to trade before 10:00am and say there’s too much noise. In other words, they fear the volatility levels will wipe them out.

That’s a fair call.

Regardless, if you learn how to trade the open, there’s no denying the profit potential. If you’re wondering, the higher-than-average volatility levels are caused by two things:

Firstly, there’s lots of trading going on… Remember, two of the three major trading sessions are operating at the same time. During the first hour of trading in London, traders in Tokyo are still working.

Secondly, the forex open in London is the first time traders in the UK and Europe can react to anything that happened the night before. As a result, volatility levels in the first 30 minutes are some of the highest you will see all day.

Your ‘Start With Forex’ Takeaway: What time does the London forex market open?

Forex traders wonder, ‘What time does the London forex market open?’ for one key reason. These forex traders hope to profit off the swings, which occasionally happen around the opening bell.

Remember, the London forex market opens at 7:00am GMT.

It marks the start of the entire forex trading day in Europe. The London session is a great time to trade forex, especially if you prefer higher volume and/or trading GBP currency pairs.

But how do you trade the open?

There’s no shortage of different strategies…

One of the most popular forex trades is the ‘opening drive trade’.

This trade involves looking at the overnight news in Europe and trying to predict how the pound will react to it when the market opens. That said, you shouldn’t approach it like betting at the casino. You should learn how to read the tape instead, before choosing a direction to trade.

The ‘opening drive trade’ is particularly effective if the pound is currently near an existing line of resistance or support. A break in either direction would likely result in a large move. That’s why you should learn how to read the tape, among other things, before starting to trade forex.

Another leading indicator is how the DAX is trading before the London Stock Exchange opens. In many instances, the London Stock Exchange, and subsequently the British pound, will follow suit.

If you want to start making money trading, it also helps signing up a forex signal or a forex system provider. That way you can learn how to make the best trades as well.

By the way, if you want to learn how to trade forex like a professional, check out our FREE forex course. Remember, there’s a million ways to make a million bucks in the forex markets. So if you want a head start in forex trading, alongside our free course, check out our approved products page for forex trading signals and systems to help kick start your trading.

To your trading success,
Start With Forex

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