The Aussie Trader’s Guide to the London Open

The London trading session, from 4:00 PM to 12:00 AM AEST, is a golden window for Australian forex traders. It offers a perfect blend of liquidity and volatility, unlike the quiet Asian or late-night New York sessions. This makes it the best time to trade forex from Australia. Whether you’re a part-time trader or a serious market participant, mastering the London open can significantly boost your trading results.

This guide will explain why the London session is so critical for AUD traders. We’ll discuss which currency pairs offer the best opportunities and how to trade the first hour using a simple breakout strategy. We’ll also cover how to prepare for your trading session during your commute home, ensuring you’re ready to act when the market moves.

Why the London Open is the Best Time for Australian Traders

The London session starts at 4:00 PM AEST, just as most Australian traders finish work. This timing is ideal because London is the world’s largest forex hub, accounting for over 35% of all global forex volume. When European banks, hedge funds, and institutional traders enter the market, liquidity surges, and price movements become more decisive.

For AUD traders, this means two key advantages:

1. Stronger Trends – Unlike the slow, range-bound price action of the Asian session, the London open often brings powerful breakouts.
2. Better Trade Execution – Tight spreads and deep liquidity mean fewer slippage issues compared to trading in quieter hours.

Another reason the London session is so valuable is its overlap with the end of the Asian session and the start of the US session. Between 4:00 PM and 7:00 PM AEST, traders get the best of both worlds—European liquidity combined with late Asian and early US participation. This creates the most reliable trading conditions of the day.

Key Currency Pairs to Watch During the London Open

Not all currency pairs behave the same way during the London session. Some are more volatile, while others trend more cleanly. Here are the best pairs to trade at the London open and why they matter for Australian traders:

1. EUR/USD – The Most Liquid Pair

EUR/USD is the most traded currency pair in the world, and it comes alive during the London session. European banks and funds drive massive volume, leading to strong directional moves. Because it’s so liquid, spreads are tight, making it ideal for breakout strategies.

2. GBP/USD – The Volatility King

The British pound is known for its sharp movements, especiallly around the London open. UK economic data, Bank of England (BoE) policy shifts, and Brexit-related news can all trigger big moves. Traders who can handle the swings often find GBP/USD one of the most profitable pairs during this session.

3. USD/JPY – The Institutional Favorite

USD/JPY attracts heavy institutional trading during London hours. Japan’s market is open early in the session, ensuring high liquidity and clean breakouts. This pair is sensitive to US Treasury yields, so keeping an eye on bond markets can provide an edge.

4. AUD/USD – For Those Who Want to Trade the Aussie

While AUD/USD is most active during the Asian session, it often sees a second wave of movement when London traders react to overnight developments. If you prefer trading the Aussie dollar, the first hour of London can provide good opportunities, especiallly with fresh economic data.

A Simple Breakout Strategy for the First Hour of London

One of the most effective ways to trade the London open is with a breakout strategy. Institutional traders often push prices beyond key levels early in the session, creating momentum that can last for hours. Here’s how to trade it:

Step 1: Identify Key Support and Resistance Levels

Before the London open (during your commute home), mark the high and low of the Asian session on your chart. These levels act as possible breakout zones. Also, note any major daily support/resistance levels from the past 24 hours.

Step 2: Wait for the First 15-30 Minutes of London

The market often sees false breakouts in the first minutes due to algorithm reactions. It’s wise to wait 15-30 minutes to see if the price holds beyond a key level. This approach helps avoid jumping into trades too quickly.

Step 3: Enter on a Retest of the Breakout Level

After a breakout, wait for a pullback to retest the level. If it holds, that’s your entry signal. This method ensures you’re entering at a strong point.

Step 4: Set a Tight Stop-Loss and Ride the Momentum

Set your stop-loss just below the breakout level for longs or above for shorts. Aim to take profit at the next key level or use a 1:2 or 1:3 risk-reward ratio. This strategy helps lock in gains effectively.

Example Trade:

• EUR/USD trades between 1.0850 (support) and 1.0900 (resistance) during the Asian session.
• At 4:15 PM AEST, it breaks above 1.0900 and pulls back to 1.0895.
• You enter long at 1.0895, stop-loss at 1.0885, and target 1.0935 (1:4 risk-reward).

How to Prepare for the London Session During Your Commute Home

The commute home is the perfect time to prepare for the London open. Here’s what you should do:

1. Check the Economic Calendar

Look for high-impact news events during the London session. Major releases can cause sudden volatility. Adjust your strategy if big news is due, either avoiding trades or waiting for the initial spike to settle.

2. Review Overnight Price Action

Quickly check the market’s movement during the Asian session. Did AUD/USD rally on strong Chinese data? Did EUR/USD stall at a key resistance level? This helps spot breakout zones before London opens.

3. Set Price Alerts on Key Levels

If you can’t watch charts live, set alerts at major support/resistance levels. Most platforms allow mobile notifications, so you don’t miss a breakout.

4. Plan Your Trades Before the Open

Decide in advance:

• Which pairs you’ll focus on (e.g., EUR/USD & GBP/USD)
• Where key breakout levels are
• Your position size and risk per trade

This prevents impulsive decisions once the market starts moving.

How This Strategy Affects Traders of Major Currency Pairs

The London open breakout strategy works best on EUR/USD, GBP/USD, and USD/JPY. These pairs have high liquidity and clear trends during this session. Here’s how each pair typically behaves:

• EUR/USD – Tends to trend smoothly once it breaks a key level, making it ideal for breakout traders.
• GBP/USD – More volatile, meaning bigger profits but also bigger swings. Best for traders who can handle rapid moves.
• USD/JPY – Often respects technical levels well, providing clean retest entries.

AUD/USD can also be traded, but it usually requires a different approach—such as fading false breakouts—due to its lower liquidity during London hours.

Final Tips for Trading the London Open from Australia

1. Stick to the First 1-2 Hours – The best moves usually happen early. After that, the market can become choppy.
2. Avoid Overtrading – One or two high-quality setups are better than forcing trades.
3. Use a Stop-Loss Always – London volatility can wipe out accounts quickly if risks aren’t managed.
4. Review Your Trades Weekly – Track which pairs and strategies work best for you.

By focusing on the London open, Australian traders can access the best volatility of the day without staying up all night. With the right preparation and a disciplined approach, this session can become your most profitable trading window.

Want More Trading Strategies Tailored for Aussie Traders?
At The Trading Coach, we help Australian traders develop winning strategies that fit their schedules. Whether you’re looking to trade forex part-time or refine your breakout trading, our coaching programs are designed for real-world success.

Disclaimer

Trading forex involves risk and may not be suitable for all investors. Past performance is not indicative of future results. Always conduct your own research before trading.

The information, strategies, techniques and approaches discussed in this article are for general information purposes only.  The Trading Coach International does not necessarily use, promote nor recommend any strategies discussed in this article.  The information in this article may not be suitable for your personal financial circumstances and you should seek independent qualified financial advice before implementing any financial strategy. The Trading Coach International is not a financial advisor and does not have AFS registration.