European Trading Session

2022年9月23日

Hello everyone!

Today we continue the review of trading sessions on the forex market.
The European Trading session is next in line.
Let's get started!

The European trading session is considered the most volatile of all. The main reasons for high volatility are the coincidences of the opening of the session with the work of the Asian session, in addition, the European session closes during the opening of the American stock exchange.
It is at this time that 5 major financial platforms are operating – the exchanges of London, Frankfurt, Paris, Luxembourg and Zurich.

Trading sessions

Zurich, Frankfurt, Paris, Luxembourg are three major trading platforms that open at 2:00 New York time, while the London Stock Exchange, the main trading center, opens at 3:00.
The opening time of trading in Europe is considered to be from the beginning of work in London, since it is on the London site that 30% of all transactions are made.

The largest companies and banks enter trading on the London Stock Exchange at about 4:00 New York time, so at this time there is the greatest volatility.

Opening hours

The period of such activity lasts about 2 hours, after which the activity of traders decreases and it is lunchtime in the offices.

With the opening of trading in America at 9 o'clock, a new momentum of volatility begins in the European trading session. The activity will last about two hours, after which it will gradually fade due to the closure of the Frankfurt, Zurich, Paris and Luxembourg exchanges.

Stock Market assets
With the opening of the European session, trading begins on the largest exchanges in Europe: the London LSE, the Austrian WBAG, the Berlin, Munich and Hamburg stock Exchanges in Germany, the Irish Stock Exchange, the Italian ISE, the Spanish BM in Madrid, the Swiss SWX, the Stockholm Stock Exchange in Sweden, as well as groups of pan-European exchanges Euronext and OMX.

During the work of the largest exchanges in the European session, the fundamental European indices are traded:

Euro Stoxx is a group of indices of 600 companies of different capitalization levels located in 18 Eurozone countries.
FTSE – index of securities of the 100 largest companies traded on the London Stock Exchange
CAC 40 – Euronext Paris Blue Chip Index
DAX – index of securities of 30 companies with high capitalization of the Frankfurt Stock Exchange
IBEX 35 – blue chip index of the BM exchange
FTSE MIB – index based on quotations of 40 largest companies on ISE
OMX STKH30 – Swedish index of securities of 30 companies with the largest capitalization traded on the Stockholm Stock Exchange
SMI – stock index of the 20 most liquid companies of the Swiss Stock Exchange
The MOSBIRZHI Index is a Russian index of shares of 50 companies belonging to the blue chips of the Moscow Exchange, calculated in rubles.
RTSI is an index of shares of the 50 largest companies on the Moscow Stock Exchange, calculated in US dollars.

Currency pairs of the European trading session
During the European session, currency pairs of countries whose exchanges are active at this time have the greatest volatility.

Currency pairs with euro:
EUR/USD, EUR/JPY, EUR/GBP, EUR/AUD, EUR/CAD, EUR/CHF, EUR/NZD, EUR/TRY, EUR/SEK, EUR/NOK, EUR/HUF

Currency pairs with the pound:
GBP/USD, GBP/AUD, GBP/BGN, GBP/CAD, GBP/CHF, GBP/CZK, GBP/DKK, GBP/HKD, GBP/HUF, GBP/JPY, GBP/NOK, GBP/NZD, GBP/PLN, GBP/RON, GBP/SEK, GBP/SGD, GBP/TRY, GBP/ZAR

Swiss Franc pairs:
AUD/CHF, CAD/CHF, CHF/BGN, CHF/JPY, CHF/RON, CHF/TRY, NZD/CHF, USD/CHF

It is also necessary to pay attention to the currency pairs of the US dollar with the Swedish, Czech, Danish krona, as well as the Hungarian forint, the volatility of which also increases slightly during the European session, especially in its last hours, when the European session intersects with the American one.

Features
Intersecting with two sessions at once: the Asian and the American, the European session becomes very volatile during the hours of intersection. It is at this time that scalpers come into play, who earn on fast movements and sharp trend changes. Due to such high volatility, beginners are not advised to trade at this time or should at least be very careful, because one move in the European session can destroy all capital.

A distinctive feature of the European Session is powerful movements and rapid change of quotes.

The lion's share of movement and trends is formed when the European Trading Session comes into play. This session also features a lot of manipulations – false breakouts, probing levels and collecting stop losses.
That is why it is very important to be attentive during this session and not risk a large percentage of capital.

Conclusion
The European trading session itself is very volatile, because it is at this time that financial centers around the world turn on. However, during the intersection of sessions, volatility increases significantly, which creates large jumps and price movements.
It will be very difficult for beginners to trade at this time, because strong movements will often reach stop losses, there will be a lot of false breakouts after which they will turn around sharply.
At the same time, professional traders who are able to analyze a large amount of information and are able to make quick decisions will be able to earn a lot of money.

Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻