Definition & Importance
"The London open is typically a time where I like to trade because it gives me a lot of opportunities and its magnitude is a lot more favorable for a short-term trader"
"The London open frequently sets up an optimal trade entry pattern that can offer 25 to 50 pips for a scalp"
"This is one of those topics where it's a very vast subject so I'm introducing you slowly into one of the most important time frames of the 24-hour banking cycle"
Key Times to Monitor
"The key times to monitor are 2:00 a.m. to 5:00 a.m. New York time"
"Determine whatever time it is in your area relative to what it is in New York time okay and physically wait for 2:00 a.m. to be in New York and then calibrate that with your broker and your local time and always a clock for New York and you'll know exactly what I'm referring to in terms of time"
"The ideal ICT London kill zone for your learning is going to be 2 a.m. to 5 a.m. and it's relative to New York time"
Extended London Session
"The London trading session actually extends beyond the 5 a.m. hour to 7 a.m. New York time"
"The London session technically extends even beyond seven o'clock in the morning up into ten to eleven o'clock in the morning New York time okay so basically it's three o'clock in the morning New York time to 11:00 a.m. to noon all relative to New York time"
"There's an overlap of New York and London trading"
London Session Characteristics
High or Low of the Day Formation
"London open generally has the highest probability of creating the high or the low of the day"
"This is one of the biggest wealth in my career it was the biggest discovery because it helps me determine where when I'm bearish the actual high of the day is going to form"
"If I can do that with a reasonable measure of accuracy or consistency just imagine if you could get three to four opportunities where you can get the high or very close to the high today and ride the majority of the daily range if you could do that a few times a month you can do exceptionally well as an FX trader"
Bullish Market Conditions
"London session typically creates the low of the day when the market is primarily bullish"
"When the market is bullish the tendency is for the market to trade down creating the low of the day in the London open ICT killzone"
"When the market is poised to trade higher on a daily timeframe we can focus on the London session to post a low of the trading day"
Bearish Market Conditions
"London session typically creates the high of the day when bearish"
"If the daily is poised to trade lower we can focus on the London session to post the high of the trading day"
Volatility & Risk
"It comes with it a great deal of responsibility in terms of knowing what the higher time frames are doing a lot of economic calendar releases come out overnight and they can be very volatile"
"If you don't know what you're doing you can get really hurt quick in the London session because it can be extremely volatile and it can be like a lightning bolt okay if you're caught on the wrong side of the marketplace"
"If there's a high impact event that's out during that timeframe you can get mowed over rather quickly and if you don't use stop-loss orders that session is going to treat you very cruelly in the form of taking money from you"
"London can be extremely one-sided and once it takes off it's pretty relentless it doesn't really give you a chance to get off the hook"
Trading Profile & Directional Movement
"The price action during the London session sees the highest probability of a large directional move in the 24 hour day"
"If we were to look at the entire 24 hour market and pick a beginning point and file it around the entire world and where it began it'll end so we have 24 hours of time if we were to measure the volume or how much action if you wanted to call it any other word its its layman's terms the most bang for your buck is going to be in the London open"
Trending Environment
"If we have a market that is let's say in a strong trending environment you want to be really focusing in on London because London will give you at the highest probability of a low-risk entry price point"
"If we have a trending model like this chances are we could see a rather quiet New York session"
London Lunch Period
"Five o'clock in the morning New York time to seven o'clock in the morning New York time which is classically like a London lunch the period where it can go quiet it can have minor little retracements"
"I don't like to see any type of entry between five o'clock and seven o'clock in the morning New York time because it can tend to wait for the New York open"
Directional Bias & Optimal Trade Entry
Using Higher Timeframe for Bias
"I'm just looking at in terms of where we are in the higher time frame and this could be a point of interest for a breakdown"
"Once we have a bearish candle like this and we're inside the area of optimal trade entry for sell or we would be deemed as a potential sell the very next candle we want to study that"
"Why should the daily bias be bearish because it's been going bullish here while we traded into an area of optimal trade entry and we got one candle showing a willingness to reject and go lower"
Bearish Setup Example
"We do not worry about that we want to see it rally up into London open it starts this area right here it's dropping here we want we don't want to see that we want to see price rally up that's where we'll sell"
"We have equal highs in here okay about 10 pips above this short-term high that gives us the high of the day at the same time we would reasonably expect to see London open create the high today"
"You open and then rally above we can look to be a seller there after it takes equal highs out"
"We have candle by stop liquidity pool okay runs up knocks the stops out and then trades aggressively lower creates the low of the day it comes off a low thing trades at or near below"
Micro Power 3 Formation
"We have a micro power 3 formation in here so we have the open the rally up the expansion low off the low closes"
"Prices fractal folks we can anticipate seeing duplicate patterns that are seen on higher time frames on a lower timeframe"
"If we understand it's a daily range if it's a bearish market profile or for looking for lower prices the opening on the daily range or the daily bar it's going to be at or near the high of the day the high is going to be very limited in terms of how much it goes above the opening price and then the largest portion of the range is going to be between the open and the close and the close is going to be near the low of the day"
"This whole candle right here this is what it looks like in a open high/low close for a daily"
Volume & Order Execution
"The London session sees the highest volume of order execution than any other trading session"
Universal Application
Ideal Currency Pairs
"The euro dollar and the British Pound pairs are ideal for this time of day and that's why I've elected to trade those two pairs"
Other Asset Classes
"It doesn't limit itself to just forex this same phenomenon occurs in other assets"
"I have students of mine that swear by this working in that asset as well it works in commodities it works in bonds it works in just about everything that trades electronically overnight"
"You can anticipate things like this to occur in index trading so if you're trading for instance the dax the ftse or the sp500 or dow or Nasdaq futures contracts overnight trading you can see the same phenomenon occur as well"
"It really isn't limited to just Forex now because I taught it to the trading community they assumed that it was limited and only salient to Forex or foreign exchange I used this same concept as a commodity trader in early 90s"
"It's not that we have an asset class that it can only function in with this type of trading or this type of price action it's completely Universal and that's pretty powerful"
Study & Review
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