London Session GBP Breakout Strategy

The London Session GBP Breakout strategy is a very popular trading method used by traders today.

Just as the name sounds, the system revolves around the concept that price action tends to breakout during the start of the London trading session, which is seen to overlap at the end of the Asia trading session.

The main idea here is that we’ll identify three prior candlesticks in the Asian trading session, locate their combined high and low and use the information to form our breakout levels.

We achieved this by drawing two horizontal lines, a yellow resistance and red support lines.

Let’s see the chart to get a better picture of the things I wrote above…

Chart Setup

MetaTrader4 Indicators: Sessions.ex4 (Default Setting), buzzer.ex4 (Default Setting), Relative Strength Index.ex4 (Parameters Modified; Period=19)

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

Recommended Trading Sessions: London

Currency Pairs: GBP/USD

Download

Download the London Session GBP Breakout Strategy

Buy Trade Example: GBP/USD (Sterling / US Dollar), H1 Chart

Fig. 1.0

Strategy

Long Entry Rules

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

  • If following the start of the London session prior to marking the high/low of the 3 previous candles, price closes above the yellow resistance level as shown on Fig. 1.0, it is an indication that bulls are pushing price higher i.e. a trigger to buy the designated currency pair.
  • If the lime line of the buzzer custom indicator runs somewhat below the price bars as seen on Fig. 1.0, the general market sentiment is said to be bullish, thus a trigger to buy the selected forex pair.
  • If the dodger blue line of the RSI Metatrader 4 indicator breaksabove the 50.00 horizontal level (see Fig. 1.0), price is said to be pushed to the upside, hence a trigger to go long.

Stop Loss for Buy Entry: Place stop loss below the red support level.

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 line of the buzzer indicator turns red, it is signaling a probable exhaustion in bulls power, therefore an exit or take profit will suffice.
  • If the dodger blue line of the RSI indicator readjust to fall below the 50.00 level, it is a trigger to exit or take profit at once.

N.B. Wait for the close of the London session to take profit on all positions if exit conditions are not met.

Sell Entry Rules

Enter a sell order if the following holds true:

  • If following the start of the London session prior to marking the high/low of the 3 previous candles, price closes below the red support level as illustrated on Fig. 1.1, it is an indication that bears are dragging for lower prices, as such a sell alert is recommended.
  • If the red line of the buzzer custom indicator runs fairly above the candlesticks as depicted on Fig. 1.1, the overall market sentiment is said to be bearish, thus a trigger to sell the currency pair of focus.
  • If the dodger blue line of the RSI indicator dips below the 50.00 horizontal level (refer to Fig. 1.1), price is said to be pressured lower, thus a signal to sell forthwith.

Stop Loss for Sell Entry: Place stop loss above the yellow resistance level.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes center stage:

  • If during a bearish trend the buzzer indicator line reverts to lime, it is pointing to a likely bullish reversal, as such an exit or take profit stance will do.
  • If the dodger blue line of the RSI indicator surges above the 50.00 level, it is a trigger to exit or take profit without delay.

N.B. Wait for the close of the London session to take profit on all positions if exit conditions are not met.

Sell Trade Example: GBP/USD (Sterling / US Dollar), H1 Chart

Fig. 1.1

Free Download

Download the London Session GBP Breakout Strategy

About The Forex Technical Indicators Used

The buzzer indicator is a trend following technical study that defines bullish (lime) and bearish (red) market sentiments based on a modified moving average.

The Relative Strength Index is a momentum indicator that gauges the magnitude of recent price changes to determine overbought or oversold conditions in the price of a forex pair.

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.

Easy Installation

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

Share Now!