London Break Out Trade

#1

FX markets are known to have low volatility in the end of the Asian session and then spring into high volatility near the London open. If we are willing to get up in the middle of the night (or perhaps one day we can automate), have you evaluated a strangle of the end of Asian session range and if so what pairs might we consider and what might be the best trade structure?

#2

i don’t trade then - have to sleep sometime :slight_smile:

…strangle based on high impact news focus on that pair to -1 +1 deviation before news looking for a 1:1 risk/reward

see bonus webinars on trading fx at night for how to do this…

#3

I love the breakout of London, but as Darrell says, we need to sleep sometimes, I am not sure about straddle, but I have my own couple of ideas, one is to try to predict the direction of the breakout with some technical analysis, and place a binary about 40 or 60 pips OTM, I know it looks to optimistic, but 60 pips for pairs like GBP/JPY or EUR/JPY is not too crazy, specially before London and NY breakouts. Besides options that much OTM are very cheap, probably 10 or 15 dollars at that time.

The other idea, that requires more work, is to monitor different pairs, and as soon as they breakout the range of the 4 hours prior London open, place the order on that direction, I would open 2, one about 20 pips OTM, and a second one 40 pips OTM, cheaper of course. Close the first one with some profit, probably but at 25 and sell at 50, and let the second one run.

As soon as the breakout takes [place, I should be able to see how strong it is, and maybe let both orders run for more profit. The option OTM by that much, are really cheap, and very likely to hit the strike. I would always take profit instead of let them run to expiration, as Darrell advices.

If I am going to stay awake and close to the computer, I would enter the order once the first 15M candle closed out of the high/low range of the Asia session (4-5 hours before London opens) I did this in regular FOREX with some success, most “London systems” place stop orders , let’s say 5 pips up or down that range, but you can get caught by many false breakouts. Most pairs go really easy another 20 pips after the close of that candle, you can just look at the charts and make your own stats.

I like EUR/USD; EUR/JPY; GBP/JPY AND GBP/USD as the best pairs available in NADEX for this strategy.

Good trading!!

#4

use the deviations to define the strikes you want and exit when it hits them…

you want probable not just low risk

for analysis just stick to the apex strategy, apex trendline, RSI etc… and you will catch any trend in progress

#5

has anyone been trying this latey