The London session: hours and what moves.

When the working day starts in London, banks across Europe join a market that has been quiet for hours. Prices on many pairs start to move faster.

That stretch is the London session, one of the main trading sessions, and for many pairs it is the most active part of the day.

What hours does the London session cover?

The London session is the part of the 24-hour forex day when trading desks in London are open. By common convention it runs from 08:00 to 17:00 London time.

Some platforms start it at 07:00, so treat the edges as approximate. Forex has no central exchange and no opening bell.

Banks trade with each other all day on weekdays, so a session is a name for the hours when one big financial centre is at work.

The session moves in UTC because the UK changes its clocks. In winter the UK keeps GMT, which equals UTC, so the session runs 08:00 to 17:00 UTC.

In summer the UK uses British Summer Time, one hour ahead of UTC, so the session runs 07:00 to 16:00 UTC. The clocks go forward on the last Sunday in March and back on the last Sunday in October.

At its start, London meets the end of the Tokyo session, which by the usual convention closes around 09:00 UTC all year, because Japan does not change its clocks. At its end, London meets New York.

New York is usually given as 08:00 to 17:00 New York time: 13:00 to 22:00 UTC in winter and 12:00 to 21:00 UTC in summer. The overlap, the hours when both centres are open, lasts four hours in each season.

The US changes its clocks on other dates: the second Sunday in March and the first Sunday in November.

In the gaps between the two countries' changes, two to three weeks in March and one week around the start of November, the overlap runs five hours, from 12:00 to 17:00 UTC.

How do you convert London hours to your own clock?

Work from UTC and add or subtract your own offset. Take a trader in Dubai, which stays on UTC+4 all year:

1. Winter session in UTC: 08:00 to 17:00. Add 4 hours: 12:00 to 21:00 in Dubai.
2. Summer session in UTC: 07:00 to 16:00. Add 4 hours: 11:00 to 20:00 in Dubai.
3. The winter overlap with New York, 13:00 to 17:00 UTC, becomes 17:00 to 21:00 in Dubai.
4. The summer overlap, 12:00 to 16:00 UTC, becomes 16:00 to 20:00 in Dubai.

The same sum for a few other cities:

In cities that never change their clocks, the session starts an hour earlier in summer. New York sees the same local hours all year, except in the weeks when the US and UK change on different dates.

The market hours tool shows every session in your own time zone, including the weeks when the clock changes fall apart.

Why is the London session so busy?

London is the largest centre for currency trading in the world. In the Bank for International Settlements survey of forex turnover, run every three years, the United Kingdom has ranked first by a wide margin in recent editions.

Banks in London quote prices to each other, to funds and to companies through the European day. More dealers quoting means more liquidity, the ease of buying or selling a large amount without moving the price much.

For you, high liquidity tends to mean narrower spreads on the main European pairs than in the quiet hours after New York closes.

Prices also tend to cover more ground in an hour, so a stop set for quiet Tokyo trading is reached more easily. Both are tendencies, and a data surprise can widen spreads within seconds.

Which pairs and events move during London hours?

Pairs that include the euro, the pound or the Swiss franc are usually the most active, since their home markets are open. Typical examples are EUR/USD, GBP/USD, EUR/GBP, USD/CHF and EUR/CHF.

Yen crosses such as EUR/JPY and GBP/JPY often pick up too, because European money arrives while Tokyo is still trading.

Scheduled news adds to the flow. UK and euro area figures on inflation, jobs and business activity mostly come out in the London morning, and Bank of England and European Central Bank rate decisions are announced in London hours.

The economic calendar lists the exact release times in your time zone.

US data arrives during the overlap. Major US releases such as the monthly jobs report usually come out at 08:30 New York time, which is 13:30 UTC in winter and 12:30 UTC in summer.

Near the close, a widely used benchmark rate is set at 16:00 London time, often called the London fix. Funds that value their holdings at that rate may trade close to it, which can bring a short burst of volume.

After London closes, New York carries the market on its own until its close, as the New York session lesson explains.

What often happens at the London open?

Many pairs drift inside a narrow band during the quieter Tokyo hours. The Asian range is the high and low price set in that period.

When Europe arrives, price often leaves the band. Sometimes it keeps going for the rest of the day, and sometimes it returns within minutes.

Some traders try to catch that first move with a plan often called a London breakout. With round, illustrative EUR/USD prices on 0.10 lot, which is 10,000 euros, one pip is worth 10,000 × 0.0001 = $1.00:

1. On a winter day, between 00:00 and 08:00 UTC, EUR/USD trades between 1.10200 and 1.10450. The range is 1.10450 minus 1.10200 = 0.00250, or 25 pips.
2. You place a buy stop 5 pips above the high, at 1.10500, and a stop loss 5 pips below the low, at 1.10150.
3. The risk is 1.10500 minus 1.10150 = 0.00350, or 35 pips. At $1.00 per pip, that is $35.
4. If price runs to 1.10850, the gain is 1.10850 minus 1.10500 = 0.00350, which is 35 pips or $35.
5. If price rises to 1.10520, fills your buy stop, then falls through 1.10150, you lose the full 35 pips, or $35.

Spread and slippage come on top of these figures, and both can be larger in the first minutes after the open.

Moves that break out and then reverse, like the one in step 5, are common at the open, and the false breakouts lesson shows how they form.

Read the plan as a picture of how price can behave when Europe arrives. Published evidence that it makes money after costs is thin and mixed.