The forex market operates 24 hours a day, five days a
week, providing ample opportunities for traders to make profits. However, not
all trading times are created equal. The London close killzone, which is from
10:00 to 12:00 ET, is an ideal time for forex trading. In this article, we'll
explore why this time of day is particularly advantageous and how to make the
most of it.
The Ideal Pairs for Trading During the London Close
Killzone
The major pairs that are usually coupled with a USD,
such as EUR/USD, GBP/USD, and USD/JPY, are ideal for trading during the London
close killzone. These pairs tend to be the most liquid and have tight spreads,
making them easier to trade.
The Optimal Trade Entry Pattern During the London
Close Killzone
The London close frequently sets up a 5-minute optimal
trade entry pattern that can offer 10 to 20 pips for a scalp. When studying the
London close, it's essential to be looking at it from a 5-minute perspective.
This time frame provides a clear view of market movements and allows traders to
make quick decisions based on the latest price action.
The Price Action During the London Close Killzone
During the London close killzone, the price action
typically sees a retracement off the high of the day on bullish days and off
the low of the day on bearish days. If we're bullish, the London close is typically
when the high of the day is formed. Conversely, if we're bearish, the London
close is typically when the low of the day is formed. It's important to pay
attention to these price movements and adjust trading strategies accordingly.
Continuation Points and Reversals During the London
Close Killzone
The London close can create continuation points for
swings that trade well into the New York afternoon hours. However, other times,
the London close can also be a reversal point for price. Traders need to be
vigilant during this time and keep an eye on the latest market developments.
Unfruitful Times for Trading During the London Close
Killzone
The times when traders are likely to be unfruitful
using this information are when there is a Z day, which goes up and down in
quiet consolidation, or a seek and destroy day, which is a really wild choppy
up-and-down day where it doesn't really go anywhere until the last portion of
the day, and then it runs out the stops and no one saw it coming. Therefore,
traders need to be aware of these market conditions and adjust their trading
strategies accordingly.
Defining the Four Reference Points that Make Up Power
Three
Now that we know the four killzones, we have been able
to define the four reference points that make up power three, which are the
open, the high, the low, and the close. Understanding what those three
phenomena take place inside of those four price points, which is the
accumulation, manipulation, and distribution, is essential for successful
trading during the London close killzone.
In conclusion, the London close killzone is an ideal
time for forex trading. Traders should focus on major pairs that are usually
coupled with a USD, pay attention to the 5-minute optimal trade entry pattern,
and adjust trading strategies based on the latest price action. Additionally,
traders need to be vigilant during this time and keep an eye on market
conditions to make the most of this advantageous trading period.