The London Session Playbook: Capturing the European Open

The London session is where the real money trades. With the overlap of Asian close and the awakening of European markets, the 3:00-4:00 AM ET window consistently produces some of the cleanest trading setups of the day.

Why London Open Matters

London accounts for roughly 43% of all forex trading volume—more than any other session. When London opens, institutional traders are making their first moves of the day, often targeting the liquidity built up during the quieter Asian session.

For index traders, this matters because:

• European institutions begin positioning in US futures
• Asian session ranges often get swept
• The direction established here frequently persists into US open

The London Playbook: Step by Step

Step 1: Mark the Asian Range (Before 3 AM ET)

Before London opens, identify the high and low of the Asian session (roughly 7 PM - 3 AM ET for ES/NQ). These levels represent the liquidity pools that London will often target.

Step 2: Watch for the Sweep (3:00-3:30 AM ET)

In the first 30 minutes of London, price often sweeps one side of the Asian range. This is the liquidity grab. VLM will flag this sweep when it happens.

Step 3: Wait for VLM Confirmation

After the sweep, don't immediately enter. Wait for VLM to signal that institutional buying/selling has emerged. This is your confirmation that smart money has taken the liquidity and is now pushing in the opposite direction.

Step 4: Entry and Management

Enter on VLM signal with stop below/above the sweep wick. Initial target: opposite side of Asian range. Extended target: previous day's high/low or a higher timeframe level.

What Makes a High-Quality London Setup

• Clean Asian range: A well-defined range with clear highs and lows
• Swift sweep: Price takes out one side quickly and decisively
• Volume spike: Increased volume on the sweep confirms institutional participation
• VLM signal: The indicator confirms the reversal
• Time window: Setup occurs in the 3:00-4:00 AM ET window

When to Sit Out

Not every London session produces a tradeable setup. Skip the session when:

• Major news is scheduled during London (ECB, UK data)
• Asian session was already volatile with no clear range
• Price is consolidating in a larger structure with no clear direction
• VLM shows no clear signal after the sweep

Risk Management for London Trading

London trades carry specific risk considerations:

• Position size: Reduce size to 50-75% of your normal day session size due to potentially wider spreads
• Stop distance: Give slightly more room—London moves can be volatile
• Time stop: If the trade hasn't worked within 45-60 minutes, consider exiting regardless of P&L
• Session commitment: Don't hold London trades into US open unless the position is already in significant profit