As part of your Forex trading education, you need to examine and understand the effect market timings can have on trading flow.

Around the time of the London open there is much market activity and you can be presented with good trading opportunities.

Around London open time develop recognition skills and add them to your Forex trading education so you can capitalize on this productive market session.

The following questionnaire and checklist will help.

London Open Preparation

Check these points about fifteen minutes to half an hour before the London market opens:

Check to see if the MACD indicators on the 4 hour and 1 hour charts are going in the same direction. If not, be very careful!

Is there MACD divergence on the 4 hour, 1 hour, or 15 minute chart? Look for other clues to confirm that price may go in the direction of MACD divergence.

What is the overall trend on the 4 hour chart?

Using the last swing high and swing low, use your Fibonacci tool and note the retracement and extension levels and see if price is approaching any of them.

Look to see where price is in relation to the 200 Exponential Moving Average (EMA) on the 4 hour, 1 hour and 15 minute charts. If price is above the 200 EMA on the 15 minute chart but below it on the 4 hour and 1 hour charts, then price is bucking the trend and you can expect it to go the other way at some point. (The opposite will be true if price is below the 200 EMA on the 15 minute chart but above it on the higher time frames.)

Are any fundamental announcements due?

As the candle closes on the 15 minute chart at London open, do you see any distinctive candle patterns such as tweezers, or doji’s or hammers indicating price exhaustion?

If I entered a trade right now in a particular direction, what would be the risk and where would I place my stop?

If, shortly after London opens, you see a number of these signs drawn from the analysis questions given above, take note and decide whether there is a good trading opportunity. Either:

trade

wait for clearer signals or a better entry point

Carrying out an analysis in this way each day at London open will do much to increase your Forex trading education.

You will become much more aware of what is happening in the Forex market and it will help you be more decisive, either to trade or not to trade.

Forex trading education does not depend on a magical formula. What it does entail is years of work, study, practice and experience, often hard earned through watching many trades go bad.

At last, the Forex trader learns the mental and emotional skills necessary to remain disciplined at all times – the hardest and most important aspect of Forex trading education.

A procedure like the one outlined above, practiced day in and day out, will help the newer trader make good progress. It won’t be too long before the trader experiences the satisfaction of consistent profits on a regular basis.