30yr Bond London Open “Bread & Butter” Trade
When trying to find high probability setups, the following three questions should always be answered: What to look for? Where to look for? When to look for?
The ‘When’ is usually the most important question: patterns and setups repeatedly fail because they appear in unfavorable market context. It can be very frustrating to execute a trade and then wait for follow-through what never happens… Knowing the ‘When’ usually does not need secret forecasting skills but commonsense only.
Although the question of ‘When to Trade’ is a complex topic, there are very simple guidelines to follow: one of them is to focus on the most active periods of a markets.
Electronic Markets trade 24h around the clock and their activity constantly changes as different financial centers of the world switch to ‘live’. Two very important periods for ‘Opens’ are the London/EU and the US Open periods.
Below you can find an example of a ‘pattern’ called London Open Trade what repeatedly happens around the European morning hours when the UK and EU opens (around 2-3 AM EST).
‘WHEN & WHAT’: expect (1) increasing momentum and volume and (2) sharp change of the direction of the previous Asian session around the London Open (2-3 AM EST).
- After a Double Distribution Sell-off day on 2 Feb, the price grinded down slowly during the Asian session to the 1 Feb VAL level
- Right after the European Open (Period ‘o’) found support at 153-03 (Buy imbalance) and reversed back to the daily VWAP/VPOC level.