Forex Strategy For London Session That Works

The Forex strategy for London session is designed to offer traders excellent opportunities to profit off the high volatility and volume experienced at the start of the London trading session.

This strategy is based on the spike in volatility experienced at the start of the London trading session.

The strategy is one of the easiest and simplest strategies in the currency trading market.

Meanwhile, it is based on the spike in volatility witnessed at the start of the London session closely following the less volatile Tokyo trading session.

It is important for us to ensure that we have entered the market during the first 3 hours of the London session, because volatility seems to be at its peak during the aforementioned time duration.

Chart Setup

MetaTrader4 Indicators: Sessions.ex4 (Default Parameters), 3_MA_Cross_w_Alert_v2.ex4 (Inputs Variable Modified; FasterMA=10), 3cJRSX_H.ex4 (Inputs Variable Modified; Length=10, CountBars=30000), Stochastic Oscillator.ex4 (Parameters Modified; %K period=15, %D period=6, Slowing=6)

Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minute, 30-Minute, 1-Hour

Recommended Trading Sessions: London

Currency Pairs: Any pair

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Buy Trade Example: USD/CAD (US Dollar/Canadia Dollar), M15 Chart

Fig. 1.0

Strategy

Long Entry Rules

Initiate a buy entry if the following indicator or chart pattern gets put on display:

  • Upon the close of the first candle following the start of the London session, if the red upward pointing arrow of the 3_MA_Cross_w_Alert_v2 custom indicator pops up fairly below the candlesticks as shown on Fig. 1.0, price is said to be driven to the upside i.e. a trigger to go long at once.
  • If the blue and magenta histograms of the 3cJRSX_H forex indicator break and hover above the 0.00 horizontal level as depicted on Fig. 1.0, the general market sentiment is said to be bullish i.e. a trigger to buy the selected currency pair.
  • If the light sea green and red dotted lines of the Stochastic Oscillator indicator break and stay above the 50.00 reference level, it is a signal to buy the forex pair of interest.

Stop Loss for Buy Entry: Place stop loss below previous session low support.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit if the following rules or conditions takes precedence:

  • If while a bullish trend is ongoing, the 3_MA_Cross_w_Alert_v2 indicator displays a green downward pointing arrow, it is pointing to weaning bulls power, therefore an exit or take profit will do.
  • If the magenta histogram of the 3cJRSX_H indicator pops up below the 0.00 horizontal level while a bullish trend is ongoing, more and more bulls are said to be closing their positions, thus an exit or take profit is advised..
  • If the light sea green line of the Stochastic Oscillator breaks below the 50.00 level during the course of a buy alert, it is signaling a likely end to the bullish momentum, as such an exit or take profit stance is apt.

N.B. In the absence of these rules, wait for the London session to expire in order to close or exit all open positions.

Sell Entry Rules

Enter a sell order if the following holds true:

  • Upon the close of the first candle following the start of the London session, if the green downward pointing arrow of the 3_MA_Cross_w_Alert_v2 custom indicator pops up somewhat above the price bars (see Fig. 1.1), price is said to be dragged lower, and hence a sell trigger is apt.
  • If the magenta and blue histograms of the 3cJRSX_H forex indicator break and stay below the 0.00 horizontal level as exemplified on Fig. 1.1, the overall market sentiment is said to be bearish i.e. a trigger to sell the designated forex pair.
  • If the light sea green and red dotted lines of the Stochastic Oscillator indicator break and run below the 50.00 reference level, it is a signal to sell the forex pair of focus.

Stop Loss for Sell Entry: Place stop loss above previous session high support.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes center stage:

  • If while a bearish trend is running, the 3_MA_Cross_w_Alert_v2 indicator displays a red upward pointing arrow, it is pointing to diminishing bears power, therefore an exit or take profit is duly advised.
  • If the blue histogram of the 3cJRSX_H indicator pops up above the 0.00 signal level during a bearish trend, bears are said to be closing their positions increasingly, thus an exit or take profit stance will suffice.
  • If the light sea green line of the Stochastic Oscillator rises above the 50.00 level during the course of a bearish trend, it is signaling a likely end to the bearish momentum, as such an exit or take profit stance is apt.

N.B. In the absence of these rules, wait for the London session to expire in order to close or exit all open positions.

Sell Trade Example: USD/CAD (US Dollar/Canadia Dollar), M15 Chart

Fig. 1.1

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About The Forex Technical Indicators Used

The sessions custom indicator is a technical tool that allows traders see the various market sessions using a colored visual representation on the chart window.

The 3_MA_Cross_w_Alert_v2 custom indicator is a forex technical study that displays arrows on the chart, with red arrows denoting bullish trends and green defining bearish trends.

The 3cJRSX_H indicator is technical indicator that delivers more accurate price analysis without risking degradation from excessive market noise.

The Stochastic Oscillator is a momentum oscillator that is attributed to George Lane.

The indicator is made up of two lines, the %K fast line and the %D slow line, while it oscillates between 1 and 100.

Basically, the Stochastic gauges the relationship between an assets closing price and its price range over a specified time period.

Easy Installation

Start using this forex strategy in just 5 minutes. Click here to get started now.

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