Since when is London the crappiest trading session?

I live in Europe, so I wake up few hours before London open. It used to be best and most volatile trading session, EU and GU used to move 120+ pips every day, GJ 300-400... But things have changed. Years ago, I still haven´t got used.

Old technical market structure don´t work like it did. LH, LL, HL, HH + supply-demand. Now it´s a f...ng ranging carousel mostly. 100 pips up, then drop 120, 80 up, drop 60.

And of course - "must love" those talking heads who mention brexit, grexit, "maybe we hike rates" (next day "we probably won´t hike rates") + Trump and his tweets.

Lunatics run the markets now.

M1 and M5 charts used to look like that ... it´s H1 now. On several pairs, usual pairs, not some cockoo exotic.



Thanks for reading!
/I feel better now/

Hey Crackpot, I feel your frustration. I know you're just venting, but I'm sure there are traders out there wondering what happened to those nice moves with follow through we used to have so I'll give a couple of reasons why things have become the way they have.

The answer simply is the whole market environment has changed and this has led to a change in structure to the way the market operates.

For one, we are in a low rate environment. Never before were negative rates even heard of, and near-zero rates is the new norm to jumpstart the global economy. This means that the big money isn't gaining much by keeping their money parked in a higher rate currency vs. the lower rate, or the carry trade as its referred to. I know their are some major central banks with higher rates out there, but uncertainty over future is keeping them out. You have to not only compare rates now, but future expectations of rates and future price movements. Remember that nice trend in USD in 2014 over the expectation of higher rates, and then 2015 it went to shit when the rate hike cycle became uncertain? This low rate environment has really dampened the FX volatility. In the past, fundamental events such as consumer sentiment were enough to cause massive moves because market participants knew central banks were watching them to decide how to move forward with their rate cycle, and now sometimes you won't even get a third of how they used to move because it's just not playing as big of a role in the central banks agenda for future rate hikes/cuts. These events get used more for quick easy money and stop gunning rather than affecting market participants perception of future rate hikes.

In fact, I believe I read in the latest BIS survey that as far as financial market participants are concerned, hot money aka the leveraged hedge funds used to dominate back in the day. Now, real money such as pension funds and mutual funds are the biggest financial players. They mainly use FX to hedge their equity holdings. I also believe I read that volume had dropped.

Then there's regulation. This market has become much more regulated since the financial crisis and this has also led to lower volatility. Traders have been forced to play it safer and since they can't take bigger risks, the moves have become smaller.

Another factor that came from regulation is internalization. All of this new regulation, and even some major banks getting charged with manipulating has led them to take less exposure in the markets. Now you have a small number of major banks who run the market. Some of the smaller banks even white label these major banks platforms and trade through them. So these major banks can internalize their books meaning they can match up their customers orders in the book. This causes movements with less force vs. the original hot potato model where dealers would pass off inventory to each other until it was sold to the customers. The hot potato model was a key force behind making those nice large extended moves.

Also think about high frequency trading and how it's begun to play role. HFT algo's are in and out positions in less than seconds whereas the original bank dealers would be building inventory or at the very least, it would take them longer to get out or hedge positions. This has led to some ugly choppy and whipsawy action.

You've already mentioned uncertainty. One day it's rate hikes in play, the next we are in risk-off mode because Trump tweeted. The big players are uncertain of the future and this is keeping them out. Imagine you were a big money investor. If news was coming out daily that would one day make things look great then the next there's no telling if you'll make anything out of it, you'd be wary of investing your money too.

With Trump said to roll back regulation I hope we'll see some better moves. And once this uncertainty over Trump not wanting higher rates and the Fed ready to continue raising rates is cleared up hopefully more volatility will follow. As far as will we go back to seeing those nice large moves from before, I couldn't tell you. The market structure is constantly evolving and there's no telling how it will end up in the future.

Market became Crackpot too

Hehe, tell me about it mate.

I spent close on 4 years learning how to trade, studying PA and reaching the conclusion that M15 was best TF for me. Went live only to then realise, Damnit, nothing's ever going to target! - ranging carousel as you say.

On EURUSD for example, conclusion I've eventually reached is this - whenever price hits a major area of potential support/resistance, we anticipate seeing quite a few candles of "flagging' as the market ranges and the order books do what they do. With this happening on all TFs it follows that if the area of SR is a MN area, then a few candles on MN chart can quite literally add up to years in terms of real time:



I think what we're seeing is just a natural phase of the market and in many respects we're probably quite fortunate to have just lived through two years of it and of course be dealing with it in real time. My side, solution for dealing with it (although it's taken a couple of years to realise what's going on and update my own trading methodology accordingly) is to work on M1. A lot of people knock M1 but structurally, and in terms of SR/SD, the principle for trading it is exactly the same as any other TF. The setups are still there.

It looks like a major shift happened after elections and London is now definitely by far the worst trading session. It's just a shadow of the past unable to go in one direction. I trade from EU too and I'm thinking of completely skipping London till NY opens and trade only NY session.

If we are talking about the "crappiest".....how about the Asian session??? There's NOTHING going on there...it's like the only thing Asia does is wait for the EU session to start in order to start trading, they have no own movements....that's how bad it is nowadays....

Only a suggestion. Develop a method for all weathers. Start thinking in terms of minimum expectancy and anything beyond is a bonus perhaps ? Think outside of the regular risk reward mantra ? Much of the animal kingdom won't pass on small prey because it is more rewarding to get something larger, they take what crosses their path as they have to sustain themselves. If they only ever wait for the reward of the big kill they might starve to death in the interim period.

Asia is much better than london lately, check your chart. Almost no zigzag crap.

That is a good suggestion. Unfortunately the best thing to do is not to trade London which has (for today) range AU 17pips, EU 24 pips, UC 31 and so on .. even the predators don't stay where there is nothing to hunt. And there is nothing to trade during first 5 hours of London, unless we have a red GBP news like today.

Asia was silent years ago, small ranges. I ran martingale type of bot during Asia back then, good results. But can´t do that anymore as Asia can be jumpy - session ranges are bigger than Europes. Also can´t run it during London, cause sometimes someone says something and market behaves like a mad cow.

switch to trading gold. there is decent volatility and moves and lots of volume no doubt. will likely stay the same for a while. spreads are good just find a decent broker.

It's happen since people believe volatility only happen in london session

Gee. I lost 700 pips in 1-2 days. when Gold dropped from 1330 to 1260. It continued to drop to 1160. I now will not trade it for awhile.

[quote=mades;9613237]{quote} That is a good suggestion. Unfortunately the best thing to do is not to trade London which has (for today) range AU 17pips, EU 24 pips, UC 31 and so on .. even the predators don't stay where there is nothing to hunt. And there is nothing to trade during first 5 hours of London, unless we have a red GBP news like today.[/quote

Yes ok. Maybe you just need to make some adjustments to your hunting skills. Adapt.

IMO, Asian session is usually one way street till 12 am Tokyo time. I think it's because nobody wants to be against what is trending. And there are only light data.

Asians usually think I share your profit. And you share my profit. So there is no point to be against what is trending. Unless it is at the bottom of support or resistant.

And Asians maybe use Ichimoku for trading signal. Just my 2 cents

[quote=Stu Effex;9613443] How to adapt to environment where there is no prey? You can drastically lower your expectations (like TP after 5-8 pips - eating mices instead of large prey) but well, it's just more efficient to wait till NY starts as it's more efficient for predator to move to a better area. That's why predators are nonstop on the move.

Anyway your solution is the only one possible (to adapt), question is how. My idea is to trade only pair which has red news during that period or trade when there was no movement during asian session and vice versa (don't trade if asians moved market enough already).

Whether the days of old come back are irrelevant, what we have to do as traders is adjust to current market conditions, not whinge about them. The markets as they are, so that's all the forex pairs and the major equities, are perfect for traders who are strong in technical analysis, and you don't have to making hundreds of pips a day to make a fantastic living, you can live very well off 30 or 40 with the right account size.

Current market conditions favour trading off of a much smaller time frame than was necessary in the past. These market conditions can be traded, and traded beautifully, provided one's trading system is adjusted accordingly.

Whatever. Giving the OP a suggestion for being able to survive in any environment you just wait for that gazelle no problem. I will fill up on mice while I'm waiting.

boosting your results instead of giving some valuable advices on how to adapt .. ehm. Were those 13 trades with TP5?

Listen here dick splash I owe you F.ALL I gave my advice to the OP.