Ultima Markets: 【 Trading Classroom 】 Trading Metaphysics, successful trading in the afternoon session...

foreign exchangeAfter familiarizing investors with the trading market, they will find that trading sentiment or market volatility is always the lowest during the Asian session, while Europe and the United States are the most enthusiastic periods. Therefore, the most classic London time break strategy has been derived, which uses the most active opening period to help traders determine whether the current break is effective and whether it is worth paying attention to in the day.

Strategic Core

The key to London's breakthrough strategy is to focus on whether there is an opportunity for prices to break through support or resistance levels within the first hour of market opening. Breakthroughs during this time period usually determine the direction of the trend for the day and are therefore crucial for traders.

Due to the significant position of the London foreign exchange market in terms of trading volume and liquidity, its trading activities have a significant impact on price trends. This strategy utilizes the initial high liquidity and volatility of the London market to seek opportunities for significant price fluctuations.

Comparison of the volatility of the seven major currencies during the Tokyo, London, and New Zealand dollar periods, in unitspips）

After the opening of the London market, monitor price performance and pay special attention to support and resistance levels.

The strategy is very simple:Above the support position1-2Set up buying stop loss at individual point positions（Buy Stop）After breaking through, you can take advantage of the trend and go long; Also below the resistance level1-2Set up selling stop loss at individual point positions（SellStop）Single, after falling below the range, take advantage of the trend to short。

However, it is worth noting that the trading opportunities of this strategy are limited, and there is still a possibility of false breakthroughs, so a strict stop loss strategy is necessary.

Best Foreign Exchange Pair

Currency pairs such as EUR/USD, GBP/USD, USD/JPY, and EUR/GBP that are actively traded during the London session are the key trading targets of this strategy, with more trading opportunities and success rates.

The first step in strategy execution is to pay attention to whether the foreign exchange currency has formed an effective fluctuation range during the Asian session, and whether it has given traders the opportunity to break through the strategy during the London session.

USD/JPY15Minute periodic chart, sourceUltima Markets MT4）

We use15Taking the minute cycle of the US dollar against the Japanese yen as an example, today's market formed a very clear range of lateral fluctuations and consolidation during the Asian session. Waiting for Beijing time16spot30After the start of trading in the London session, pay attention to the prices along the upper and lower edges of the fluctuating range. When a direction is breached, it is necessary to start implementing a breakout strategy of entering the market with the trend. The stop loss is set as the support resistance position in the other direction, and the stop gain is set as the closing time of London on the same day, usually Beijing time23spot30Minute.

London BreakthroughForeign exchange transactionsStrategies can provide profitable opportunities for day traders, which may sound very simple, but most strategies are more difficult than just enforcing discipline. Traders should have a thorough understanding of strategic mechanisms, setting stop loss and profit targets, and effective risk management. Successful implementation requires traders to be able to make quick decisions while being aware of risks and potential profit opportunities.

Disclaimers

The comments, news, research, analysis, pricing, and other information contained in this article can only be considered as general market information and are provided solely to assist readers in understanding the market situation and do not constitute investment advice.UltimaMarketsReasonable measures have been taken to ensure the accuracy of the data, but the accuracy of the data cannot be guaranteed and can be changed at any time without notice.UltimaMarketsWe will not be responsible for any losses or losses (including but not limited to any loss of profits) that may arise from the direct or indirect use or reliance on such information.