The Best Time to Trade the Euro

London is the largest and most important trading center in the world. It is the second trading session, following the Asian-Pacific session. Trading during this session constitutes an astounding fifty percent of the world’s total currency trading volume for the day. Since London gets the largest share of the region’s trading volume (approximately 30 percent), it is the headquarters for the European trading session. The major currency focus during the European session is the Euro (EUR).

The European session is the most volatile trading period for the day.

The European session runs from 2am (ET) to 12am (ET).

The European session presents a high risk to traders. It is a challenge even for risk-tolerant traders.

Currency pairs with good pip movements during this session are:

• GBP/CHF
• GBP/JPY
• USD/CHF

The average pip range is approximately 140 pips.

Note: The USD/EUR is also a viable alternative during this session, but can make even larger moves during the European-US crossover session.

Avoid entering trades during the Snooze Session (2am to 4am ET).

The European session presents a very high risk to traders. During this session, price changes can be quick and short-lived, which is difficult even for risk-averse traders with tight stop-loss orders.

Currency pairs with lower risk during this session are:

• EUR/GBP
• EUR/CHF
• USD/JPY

The average pip range is approximately 58 pips.

Avoid trading during the Snooze Session (2am to 4am ET).

The European session is an exciting trading period! News and economic data from the Eurozone, Germany, France, Switzerland, and the United Kingdom cause the currencies to make big pip movements throughout the session. With the opening of the US session and the release of US data, these pip movements are even bigger. Strong daily and hourly trends and high ADX levels are characteristic of the European session.

I use the European session to trade currencies that I expect to make large, directional pip movements or break out of tight trading ranges. I predict that these will occur when economic data is released in the Eurozone or is expected from the US. The Non-farm Payrolls Report, Manufacturing Survey, and GDP report are the biggest market movers in the US that cause price movements during European session. Of course, any meeting or announcement by the European Central Bank (ECB) or the Bank of England (BOE) will also cause big price movements during the European session.

I mostly focus on the USD and Euro, particularly during the European-US crossover trading session. However, I will also trade the Swiss Franc (CHF) and the British Pound (GBP). With its extremely high trading volume and volatility, my focus is on trades that are strong trending on the daily or hourly charts. I can usually find currency pairs with an ADX of 30 or 35. These trends are the fastest moving and the most reliable.