SESSION TRADING

SESSION TRADING 

Asian Session  

The Asian Range determines the directional bias or likely direction for the majority of the London & NY sessions. Where the money is positioned in Asian dictates the profit release on the trading day. Typically trades counter the NY session direction in a corrective bounce.
  • Asian Kill Zone
      • 6:00pm - 10:00pm EST is typical Asian Kill Zone for trades.  
      • Kill Zone is the time of day where you'd ideally look for a trade.
      • Asian Session is better for position trading in long term positions.
  • Whiplash Short & Catapult Buy
      • Sunday Open Gap Higher from Friday's Close
      • Wait for initial attempts to continue higher and watch SMT for Negative or Bearish Divergence.
      • Short near Sunday Opening and look for exit at the Friday Closing Range.
      • For bullish environments you can buy the SMT Positive or Bullish Divergence inside and or at the Friday closing range upon gap filling.
      • Take profits at 20 pips and set remaining portion to breakeven and look for London continuation into NY session.
  • Whiplash Buy & Catapult Short
      • Sunday Open Gap Lower from Friday's Close
      • Wait for initial attempts to continue lower and watch SMT for Positive or Bullish Divergence.
      • Buy near Sunday Opening and look for exit at the Friday Closing Range.
      • For bearish environments you can short the SMT Negative or Bearish Divergence inside and or at the Friday closing range upon gap filling.
      • Take profits at 20 pips and set remaining portion to breakeven and look for London continuation into NY session.
  • Lazy Asian Session - Session doesn’t typically attempt to break into new highs / lows.
    • Asian Session Buy - Typically trades counter the NY session direction in a corrective bounce.
    • Asian Session rarely sees follow through on new lows.
    • On higher timeframes like Weekly, Daily, 4 Hour, and or 60 minute charts, note Key Support Levels.
    • Anticipate OTE Buys to form in Asian Session when price trades down into Support.
    • Take profits at OTE levels for NY Swing and leave portion for continuation into London.
  • Asian Session Sell - Typically trades counter the NY session direction in a corrective bounce.
    • Asian Session rarely sees follow through on new highs.
    • On higher timeframes like Weekly, Daily, 4 Hour, and or 60 minute charts, note Key Resistance Levels.
    • Anticipate OTE Sells to form in Asian Session when price trades up into Resistance.
    • Take profits at OTE levels for NY Swing and leave portion for continuation into London.

London Open

  • London Open Kill Zone Sweet Spot – 7:30am - 8:30am GMT
  • Long Opportunity - Raid Stops then Shoot for Support
    • Goal is to dial in on the Low of the day to go long from.
      • First objective after London Open is to raid Asian High stops.
      • After stops are taken out, price moves lower testing key support levels & OTE.
      • From London Open to Close or 18:00 GMT, the Daily Range is put in and you should not use tight trailing stops.
  • In Bullish conditions you may leave a portion of the trade on beyond 18:00 GMT for short term overnight trades that can pay well with only 10-20% of original position.

Short Opportunity - Raid Stops then Shoot for Resistance
  • Goal is to dial in on the High of the day to short from.
    • First objective after London Open is to raid Asian Low stops.
    • After stops are taken out, candles move higher to test key resistance levels & OTE.
    • From London Open to Close or 18:00 GMT, the Daily Range is put in and you should not use tight trailing stops.
  • In Bearish conditions you may leave a portion of the trade on beyond 18:00 GMT for short term overnight trades that can pay well with only 10-20% of original position.
  • London Open
    • During a higher TF consolidation, we wait for the daily range to contract. Monitor the hourly charts for consolidation near key S/R levels. The ideal setup would lead to range expansion which means that the previous day is usually a short range day. Use the high/low of previous day to measure OTE.
    • The setup usually occurs after a daily fractal forms at a key level. Look for confluence of Support & Resistance, weekly pivots and projection targets. Number the bars of the Head & Shoulders pattern from 1 to 5, 3 being the head. In a perfect world days 3 & 4 are short range days and I would use Bar #4 as the green light to anticipate range expansion on days 5 & 6.
    • The setup occurs more frequently during a higher TF range expansion. In this environment sentiment is a major catalyst for frequent LO setups. I use a 30 Period Williams %R on the 4Hr chart to gauge short term sentiment.
    • Price is relentlessly reaching for a key level. Look for confluence of Support & Resistance, weekly pivots and projection targets. If price retraces during LO, to retest a S&R level, the run is usually short lived and a swift move towards our target can be expected at NYO.
    • During a smaller TF range expansion, I use the 50 period %R on the 30Min chart as a sentiment meter. Also used to gauge counter-trend exhaustion and key off of S/R role reversals.
  • London Close
    • London Close Kill Zone
      • London Close at 11am EST Approx.
      • Kill Zone is between 10am - 1pm EST.
      • Generally the market will look to encounter profit taking around 11am EST as London traders close their trading day and NY traders are taking lunch.
    • Two Dominant Trade Types
      • Counter Trend Trade: Quick 15-20 pip scalp using 5-min chart for short-term market exposure.
      • London Close Trend Trade: Trend trade entry to get in sync with the daily trend or long term price swing.
    • Average Daily Range
      • Identify 5, 10, and 20 day ADR to get an idea of the pips trading in the current environment.
      • Use 5 day ADR around NY Open which is when the market has ""priced in"" the high or low of the day.  Add the 5 day ADR to the highest high and lowest low to ADR highs and lows.
    • Optimal Trade Entry
      • P. Stop is placed 10 pips beyond the High or Low on Fib.
      • First objective is 15-20 pips profit.
      • Last profit is taken at the High or Low of the swing.
      • The Entry Point is the 62-79% levels or between them (~70.5)
    • London Close Counter-Trend Buy
      • Reference the US Dollar Index and determine if it has met its 5 day Average Daily Range
      • Determine if the pair traded has met its 5 day ADR.
      • Prior to the London Close Kill Zone window determine higher timeframe Weekly, Daily, 4-hour, 1-hour S&R levels.
      • Note the previous 3 days highs and lows, Session Highs/Lows, and Pivot Points
      • As price drops down into the ADR level and Kill Zone, look at the 5-min lows for a bounce off of one of the levels.
      • After the bounce, pull a Fib over the short term upswing and consider buying the pair at OTE on the 5-min chart.
      • Risk 10 pips under the low used for the Fib and take profits on 15-20 pips and hold for the high of the Fib based swing.
      • Ideally, better trades form on swings measuring at least 15%-20% of the daily range of the trading day.
    • London Close Counter-Trend Sell
      • Reference the US Dollar Index and determine if it has met its 5 day Average Daily Range
      • Determine if the pair traded has met its 5 day ADR.
      • Prior to the London Close Kill Zone window determine higher timeframe Weekly, Daily, 4-hour, 1-hour S&R levels.
      • Note the previous 3 days highs and lows, Session Highs/Lows, and Pivot Points
      • As price rises up into the ADR level and Kill Zone, look at the 5-min lows for a bounce off of one of the levels.
      • After the bounce, pull a Fib over the short term downswing and consider selling the pair at OTE on the 5-min chart.
      • Risk 10 pips above the high used for the Fib and take profits on 15-20 pips and hold for the low of the Fib based swing.
      • Ideally, better trades form on swings measuring at least 15%-20% of the daily range of the trading day.
    • London Close Setup
      • During a higher TF consolidation, we wait for the daily range to expand. Monitor the hourly charts for range expansion towards key S&R levels. The ideal setup would lead to range contraction which means that we are coming off a LO profit release.
      • The setup usually occurs during trend exhaustion at a key level. Look for confluence of S&R, weekly pivots and projection targets. LC setups are counter trend trades. Use the 30 period Williams %R on the 4hr chart and try to stick the weekly high/low on Bar #3.
      • During a higher TF range expansion this setup is not recommended.

Trading the New York Session

  • NY Open Kill Zone Sweet Spot – 11:00am – 13:00 GMT
  • Range Expansion - Small range or series of small range days/bars will suggest an upcoming large trading range day/bar.
  • Close Probability
    • 80% odds of the close being at or near the high or low for the day/bar.
    • If in a bearish scenario, ~75% odds that the open is near the high and the close is near the low.
  • NY Open - Easiest session to trade. London high/low already in place.
  • Ideal Entry
    • For Shorts, Sell on a move up.
    • For Longs, buy on a move down.
  • Setting a Stop when ideal level is too many pips - When the ideal stop is too many pips away from the 20-30 pip stop level, go to smaller timeframes and identify a stop level on what price is telling you on the smaller level.
    • NY Session Trades Notes:
    • Get in sync with what the higher level timeframes are telling you. Majority of the time the trades will follow that trend.
    • If looking at daily timeframe and market opened near the day’s highs and has trended lower, we'd look for more shorts to push to a day's low.  London Session created the day's high.
    • London Close coinciding with NY Session lunch time allowed for a counter trade opportunity. Take profit at the 38% retracement level of the full days range.