London breakout

What it is

During the Asia session, many markets (especially European currency pairs) trade in a narrow range. When London opens, volume arrives and price often breaks out of that range with momentum.

The plain version trades the breakout; the cautious version waits to see whether the first break is a sweep (see Judas swing) before committing.

How to spot it

• Mark the Asia high and low before London opens.
• Watch the first hour or two of London for a clean close outside the range.

How to use it

• Enter on the close outside the range or its retest; stop inside the range.
• Target a multiple of the range's height or the next level.

Common mistakes

• Trading breakouts of an Asia range that was already wide.
• Buying the first spike without checking whether it's just a sweep.

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