Overview
This lecture introduces the ICT London Open Kill Zone, highlighting its significance in trading, key timeframes, and patterns that provide high-probability entries, especially for forex but also applicable to other asset classes.
London Open Kill Zone Basics
- The London Open Kill Zone (LOKZ) is from 2:00 a.m. to 5:00 a.m. New York time.
- Convert the LOKZ to your local time by referencing New York time for precision.
- The London session is considered the most active and volatile period in the 24-hour trading day.
Importance and Characteristics of the London Session
- The London session often sets either the high or the low of the trading day.
- EUR/USD and GBP/USD pairs are most responsive during this session.
- The LOKZ provides optimal trade setups, frequently yielding 25–50 pip scalps.
- This period has increased volatility due to overnight economic news releases.
Trade Entry Patterns & Practical Applications
- In a bullish daily trend, the London session commonly establishes the day’s low, and vice versa for bearish trends.
- Watch for price to rally or drop into the LOKZ to create the day’s high or low before trending.
- Use the previous day's London session data to frame optimal trade entries for today.
- Pattern recognition, such as micropower 3 formations, can help determine probable market direction.
Risk and Volume Considerations
- The London session has the highest volume and offers the greatest price movement ("bang for your buck").
- High volatility can result in rapid losses without stop-loss orders.
- Volatility is not limited to forex; similar behaviors are seen in commodities, indices, and futures during this window.
Price Action & Study Recommendations
- Major market moves often begin in the LOKZ; analyze how highs/lows form in this window on your charts.
- Optimal trade entries are found after liquidity pools are raided (e.g., stops above equal highs/lows).
- Use full candle wicks (not just bodies) to frame your high/low range for trade analysis.
Key Terms & Definitions
- London Open Kill Zone (LOKZ) — The 2:00–5:00 a.m. New York time window known for high-probability market moves.
- Micropower 3 Formation — A fractal price pattern: open, expansion (to high or low), and close, indicating trend direction.
- Liquidity Pool — Cluster of stop orders around equal highs/lows, often targeted before market reverses.
- Optimal Trade Entry — The price zone offering the best risk-reward for entering a trade, typically after stop hunts.
Action Items / Next Steps
- Study and mark the London Open Kill Zone on your charts and observe daily high/low formations.
- Practice converting New York time to your local trading time.
- Prepare for the next lesson on the New York session and its overlap with London.