Lesson 6: When to Avoid the London Session

Overview

Large Range Day Prior: Avoid trading the day after a large range day (>2x the average five-day range) as it often leads to consolidation or choppiness.
After Three Consecutive Daily Closes:
- Up Closes: Avoid London longs after three consecutive up closes.
- Down Closes: Avoid London shorts after three consecutive down closes.
Post-FOMC Events: Whipsaw price action can disrupt London session.
Ahead of Non-Farm Payroll Numbers: Typically on the first Friday of each month. Avoid trading London that day.
Leading into a Holiday/Long Weekend: Avoid London session as the market may go quiet with reduced liquidity.
Multiple High/Medium Impact News Drivers: Can complicate the London session.

Central Bank Dealers Range > 50 pips: Consider avoiding London.
Asian Range > 40 pips: Avoid unless criteria for delayed protraction profile are met.
Sustained Movement from 8 PM NY: Indicates poor London session potential.
Non-Consolidating Central Bank/Asian Range: Avoid if not in a tight consolidation.

Daily Chart Respecting PDA Rates: Market should respect clear, non-ambiguous levels.
Market Bias:
- Trading Higher to Premium Array: Ideal for London longs.
- Trading Lower to Discount Array: Ideal for London shorts.
Daily Range and Expansion Days: Avoid if daily range exceeds five-day average. Look for expansion days if not exceeded.

Rule-Based Trading: Use rules and filters to determine when not to trade.
Avoid Overtrading: Focus on high-probability conditions.
Equity Growth Strategy: Avoid trading every day; aim for significant range days.

Avoid London if conditions suggest low probability: This helps prevent unnecessary losses.
Maintain a Checklist: Write rules by hand to improve retention.
Focus on High Probability Sessions: Trade when odds are significantly in your favor.