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The rise of algorithmic trading has made it possible for traders of all levels to execute trades with precision and discipline 24/7. 

However, while algorithms, such as Expert Advisors (EAs) used on MT4or MT5, remove emotion from the execution, they cannot remove the human element from trading. 

The psychological challenges may be different when using EAs than those facing the discretionary trader, but challenges still exist.

Every automated strategy reflects the trading beliefs, thinking, logic, and discipline of its creator. This is true in development and in a live environment.

The “code” in EA trading should mean more than lines of MQL5. It should be based on a code of conduct that defines the standards by which you operate.

In a world where automation can amplify both success and mistakes, a structured set of principles helps ensure EAs remain a tool for improvement, not a shortcut to risk.

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1. Use EAs as Trading Tools, Not Replacements for Good Practice

EAs are instruments, tools of the trade, not a replacement for skill, judgment, or responsibility. Their role is to supplement a trader’s edge, not substitute for it.

For example, a swing trader who relies on price-action patterns might automate only specific entry conditions to ensure consistency, while continuing to manage exits manually. 

Conversely, a systematic trader may automate the entire process but still monitor performance against broader market regimes as a filter for entering or exiting automated trades. 

Before an EA is ever switched on, traders must ask: What problem is this solving for me? Is it improving my execution discipline, making sure I miss fewer trading opportunities, or helping me diversify and trade efficiently across multiple markets? 

Automation magnifies intent and thoroughness in peroration, execution and system refinement. If your answer is simply “to make money while I sleep,” the foundation is not enough, and perhaps you should look a little deeper.

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2. Design with Clarity and Thoroughness

The design phase is where your EA professionalism begins. Every EA must be built on a clear, rules-based logic that matches the trader’s intent and desire to take advantage of specific price action. 

In practice, this means you need to define exactly what the EA is supposed to do from the outset and, equally, what it will not do.

Integrity in design means documenting your logic before you code it. Write out the concept in plain language.

“Enter long when a bullish engulfing candle forms above the 20 EMA during the London session.”

“Exit when RSI crosses below 70 or after two ATRs in profit.”

Once defined, those conditions become the contract between the trader and the code. 

Whether you are attempting to code yourself, using a third party to code for you or even using an off-the-shelf EA, ambiguity or lack of clarity should be addressed. 

Without this, there will always be a temptation to shift or a failure to recognise the need for refinement.

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3. Test with Transparency

Backtesting is often where enthusiasm overtakes discipline. It’s easy to be seduced by an impressive equity curve, yet testing is only valuable when it’s transparent.

Successful EA traders will often treat every backtest as additional data, not exclusive hard validation that an EA definitely perform in a live market environment. 

They record settings, market conditions, and measure key metrics, saving results journal and different versions. This allows an objective comparison and sets the foundations for what should be measured on an ongoing basis.

Transparency also means using realistic conditions — spreads, slippage, and ticks rather than OHLC for final testing, all provide a greater quality of metrics that may more accurately mirror live trading. 

A good practice is to maintain a “testing log” alongside the EA code. For example:

• Version number
• The purpose of the test (e.g., confirm logic or optimise ATR period for setting stop or take profit levels)
• The conditions under which it was run, including underlying market conditions and arguably directional and sessional differences.
• The interpretation of results (what was learned, not just the numbers)

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4. Avoid the Illusion of Certainty

The temptation to fine-tune parameters until a backtest looks flawless is a trap known as overfitting. 

It produces systems that may often perform brilliantly on historical data but collapse in a heap in live markets, where other external variables can be equally, if not more influential.

The necessity for and rigour and robustness in testing include approaches such as: 

• Forward testing: Running the EA on new data to confirm behaviour.
• Walk-forward analysis: Re-optimising in rolling segments to ascertain whether there is parameter stability.
• Parameter clustering: Checking if profitability holds across a range of values rather than one precise setting. E.g., it will still be profitable if a level of partial close is 40, 50 or 60% of your position.

A robust EA trader accepts uncertainty as reality. A recognition that markets can evolve, conditions often shift, and no single setting is likely to remain optimal forever. 

Your goal is durability, not perfection in a single set of market conditions.

An EA that performs moderately well across different conditions is often far more valuable than one that looks brilliant in backtest isolation.

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5. Adequate Preparation for Live Execution

The transition from backtest to live trading is not something to take lightly; it is a major operational step. Before going live, traders should have a checklist covering readiness that includes confirmation of logic, appropriate infrastructure, and management of risk.

Steps to achieve this aim can include:

• Running the EA in visual backtest mode to confirm correct trade placement.
• Checking symbol specifications, such as contract size, margin requirement, and swap cost.
• Confirming VPS stability — low latency, sufficient processing power for the number of EAs you are trading, and reliability
• Testing on a demo account first, under live market conditions and then move to a live environment using minimum trading volume before scaling.

EA traders should have a set of minimum values for key metrics such as Net profit vs balance drawdown, win rate, consecutive wins and losses and Sharpe ratios before moving to live. 

A full checklist that incorporates minimum testing performance as well as infrastructure management is critical. 

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6. Manage Risk is About You, Not Your EA

The most dangerous misconception in automated trading is that the EA “handles risk.” It does not. It simply executes your instructions, whether these are good or bad for a particular trade.

As a trader, you remain responsible for every lot size, margin call, and equity swing. Proper capital management means understanding total exposure across all running EAs as a whole, not just an individual one.

Running five EAs, of which risks 1% of account equity per trade is not necessarily diversification, particularly if the assets are heavily correlated.

In the same way that you should be rigorous in decision-making from test to live environment, it is equally important when scaling, i.e., increasing trading lot sizes.

Scaling rules should be data-based and only considered after a defined critical mass of trading activity of a single EA. Only increasing trade size when the EA’s equity curve maintains a positive slope over a rolling period, or when the profit factor exceeds a set threshold for a given number of trades.

Once scaling is taking place beyond the minimum volume, it may be worth considering the implications of the reality that risk is dynamic. 

Experimenting with adjusting lot size against the strength of the signal or underlying market conditions for specific EAs may be worthwhile.

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7. Monitor, Measure, and Refine

A live EA is not a “set-and-forget” machine. It’s a continuous process that requires observation and refinement on an ongoing basis

Regular and planned reviews of EA performance through appropriate reporting will always reveal valuable insights beyond your overall account balance. Aim to answer questions such as:

• Is the EA behaving as designed?
• Are trade times and volumes consistent with expectations?
• Has the average profit per trade decreased, suggesting a changing market structure?

A disciplined EA trader will use these insights to decide when to pause, adjust, or retire an EA. For instance, if a breakout EA consistently loses during low-volatility sessions, the solution might not be “optimise again” but to restrict trading hours within the parameters.

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8. Maintain Operational Discipline

Even the best logic fails if your trading environment is unstable or unsuitable. Operational discipline ensures that the infrastructure supporting EAs is reliable, secure, and constantly monitored for any “events” that may influence the execution of your book of EAs.

This includes maintaining a properly configured VPS (Virtual Private Server) with sufficient CPU capacity and regular monitoring of resource use.

Traders should track activity, confirming that log files are saving correctly, and not only know how to install their EA to trade live (and other files that may be necessary for it to run, e.g., include files) but also how to restart or stop an EA without disrupting open trades.

Operational discipline also extends to record-keeping and organisation of your automated trading performance evaluations and resources. Notes on anything that looks unusual for further review, and systems that dictate when you take actions, are all part of putting the right things in place.

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Final Thoughts 

Your Code of Conduct for EA Traders is not a rulebook but a roadmap for moving towards excellence in the design, deployment, and management of automated trading systems.

Although each standard can stand alone as something specific to work on, they are also inextricably linked to the whole. 

View your automated trading as an extension of who you are and want to become as a trader. An EA can execute your edge, but it cannot replace your accountability for actions, your need for learning and improvement, nor your commitment towards better trading outcomes.

The best traders don’t just build and use algorithms; they build standards of practice and follow through to move towards becoming a successful EA trader.

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The United States entered a government shutdown on October 1, 2025, after Congress failed to agree on full-year appropriations or a short-term funding bill. Although shutdowns have occurred before, the timing, speed, scale, and motives behind this one make it unique. This is the first shutdown since the last Trump term in 2018–19, which lasted 35 days, the longest in history.For traders, understanding both the mechanics and the ripple effects is essential to anticipating how markets may respond, particularly if the shutdown draws out to multiple weeks as currently anticipated.

What Is a Government Shutdown?

A government shutdown occurs when Congress fails to pass appropriation bills or a temporary extension to fund government operations for the new fiscal year beginning October 1.Without the legal authority to spend, federal agencies must suspend “non-essential” operations, while “essential” services such as national security, air traffic control, and public safety continue, often with employees working unpaid until funding is restored.Since the Government Employee Fair Treatment Act of 2019, federal employees are guaranteed back pay to cover lost wages once the shutdown ends, although there has been some narrative from the current administration that some may not be returning to work at all.

Why Did the Government Shutdown Happen?

The 2025 impasse stems from partisan disputes over spending levels, health-insurance subsidies, and proposed rescissions of foreign aid and other programs. The reported result is that around 900,000 federal workers are furloughed, and another 700,000 are currently working without pay.Unlike many past standoffs, there was no stopgap agreement to keep the government open while negotiations continued, making this shutdown more disruptive and unusually early.

Why an Early Shutdown?

Historically, most shutdowns don’t occur immediately on October 1. Lawmakers typically kick the can down the road with a “Continuing Resolution (CR)”. This is a stopgap measure that can extend existing funding for weeks or months to allow time for an agreement later in the quarter.The speed of the breakdown in 2025, with no CR in place, is unusual compared to past shutdowns. It suggests it was not simply budgetary drift, but a potentially deliberate refusal to extend funding.

Alternative Theories Behind the Early Shutdown

While the main narrative coming from the U.S. administrators points to budget deadlock, several other theories are being discussed across the media:

• Executive Leverage – The White House may be using the shutdown as a tool to increase bargaining power and force structural policy changes. Health care is central to the debate, funding for which was impacted significantly by the “one big, beautiful bill” recently passed through Congress.
• Hardline Congressional Factions – Small but influential groups within Congress, particularly on the right, may be driving the shutdown to demand deeper cuts.
• Political Messaging – The blame game is rife, despite the reality that Republican control of the presidency, House, and Senate, as well as both sides, is indulging in the usual political barbs aimed at the other side. As for the voter impact, Recent polls show that voters are placing more blame on Republicans than Democrats at this point, though significant numbers of Americans suggest both parties are responsible
• Debt Ceiling Positioning – Creating a fiscal crisis early could shape the terms of future negotiations on borrowing limits.
• Electoral Calculus – With midterms ahead, both sides may be positioning to frame the narrative for voters.
• Systemic Dysfunction – A structural view is that shutdowns have become a recurring feature of hyper-partisan U.S. politics, rather than exceptions.

Short-Term Impact of Government Shutdown

AreaImpactFederal workforceHundreds of thousands have been furloughed with reduced services across various agencies.Travel & aviationFAA expects to furlough 11,000 staff. Inspections and certifications may stall. Safety concerns may become more acute if prolonged shutdown.Economic outputThe White House estimates a $15 billion GDP loss per week of shutdown (source: internal document obtained by “Politico”.Consumer spendingFederal workers and contractors face delayed income, pressuring local economies. Economic data releaseKey data releases may be delayed, impacting the decision process at the Fed meeting later this month.Credit outlookScope Ratings and others warn that the shutdown is “negative for credit” and could weigh on U.S. borrowing costs.Projects & researchInfrastructure, grants, and scientific initiatives are delayed or paused.

Medium- to Long-Term Impact of Government Shutdown

1. Market Sentiment

Shutdowns show some degree of U.S. political dysfunction. They can weigh on confidence and subsequently equity market and risk asset sentiment. To date, markets are shrugging off a prolonged impact, but a continued shutdown into later next week could start to impact.Equity markets have remained strong, and there has been no evidence of the frequent seasonal pullback we often see around this time of year.Markets have proved resilient to date, but one wonders whether this could be a catalyst for some significant selling to come.

2. Borrowing Costs

Ratings downgrades could lift Treasury yields and increase debt-servicing costs. The Federal Reserve is already balancing sticky inflation and potential downward pressure on growth. This could make rate decisions more difficult.

3. The Impact on the USD

Rises in treasury yields would generally support the USD. However, rising concerns about fiscal stability created by a prolonged shutdown may put further downward pressure on the USD. Consequently, it is likely to result in buying into gold as a safe haven. With gold already testing record highs repeatedly over the last weeks, this could support further moves to the upside.

4. Credibility Erosion

Repeated shutdowns weaken the U.S.’s reputation as the world’s most reliable borrower. With some evidence that tariffs are already impacting trade and investment into the US, a prolonged shutdown could exacerbate this further.

What Traders Should Watch

For those who trade financial markets, shutdowns matter more for what they could signal both in the short and medium term. Here are some of the key asset classes to watch:

• Equities: Likely to see volatility as political risk rises, and the potential for “money off the table” after significant gains year-to-date for equities.
• U.S. Dollar: With the US dollar already relatively weak, further vulnerability if a shutdown feeds global doubts about U.S. fiscal stability.
• Gold and other commodities: May continue to gain as hedges against political and credit risk. Oil is already threatening support levels; any prolonged shutdown may add to the bearish narrative, along with other economic slowdown concerns
• Outside the US: With the US such a big player in global GDP, we may see revisions in forward-looking estimates, slingshot impacts on other global markets and even supply chain disruptions with impact on customs services (potentially inflationary).

Final Word

The 2025 shutdown is unusual because of its scale and because it started on Day 1 of the fiscal year, without even a temporary extension. That speed points to a deeper strategic and political contribution beyond the usual budget wrangling that we see periodically.For traders, the lesson is clear: shutdowns are not just what happens in Washington, but may impact confidence, borrowing costs, and market sentiment across a range of asset classes. In today’s world, where political credibility is a form of capital, shutdowns have the potential to erode the very foundation of the U.S.’s role in global finance and trade relationships.

Some traders consider entry on the initial retest after the breakout, but (arguably) the higher probability setup is with confirmation that the breakout has failed. Typically, this is confirmed when price closes back through the breakout level and invalidates the initial breakout candle.Psychologically, this reflects the point where breakout traders are trapped, forced to exit, while contrarian traders seize the opportunity. The failed breakout acts as a battleground of conviction — and once the breakout direction is rejected, momentum often flips strongly in the opposite direction.

What Is a Fake-out Reversal?

The “Fake-out Reversal” is a common price action setup that is based on two important price action principles:

• Markets often create the illusion of a breakout at key support or resistance levels.
• A significant number of these breakouts lack conviction, trapping breakout traders before reversing sharply back into the prior range.

Bearish Fake-out Reversal

A bearish Fake-out Reversal setup occurs when resistance appears to have broken to the upside, only for the price to fail and reverse lower back into the range.

• A: Break → price pushes above resistance, suggesting strong buyer control.
• B: Retest → price pulls back to the breakout level, holding temporarily as support.
• C: Fail / Fake-out → the retest is rejected and a bearish candle close occurs beneath the original breakout level or breakout candle low, signalling buyers have lost conviction and sellers are regaining control.

This sequence reflects the inability of buyers to sustain price above resistance, while sellers use the failure to drive price lower.You can see a real chart example of this on the 1-hour EURUSD, where resistance was briefly breached, retested, and then price reversed sharply back below the level.

Bullish Fake-out Reversal

A bullish setup occurs when support appears to have broken to the downside, only for price to fail and reverse higher back into the range.

• A: Break → price falls through support, suggesting strong seller conviction.
• B: Retest → price rallies back to the breakout level, holding temporarily as resistance.
• C: Fail / Fake-out → the retest is rejected and a bullish candle close occurs above the original breakout level or the breakout candle high, signalling sellers have lost conviction in the breakout, and buyers are regaining control.

This sequence reflects sellers’ inability to keep price beneath support, and buyers use the breakout failure to force a reversal higher.You can see a real chart example of this on the hourly AUDUSD chart, where a false breakdown beneath support was reversed by strong bullish candles reclaiming the level.

Stop Placement and Exits

Risk management for the Fake-out Reversal often focuses on the failed breakout zone itself:

• For bearish setups, stops are commonly placed just above the retest wick or above the breakout candle high.
• For bullish setups, stops are typically set just below the retest wick or the breakout candle low.

Profit-taking exit approaches can include:

• Using fixed risk-to-reward targets, often 2:1 or better.
• Profit targets can be set near the opposite side of the range or the next key support/resistance level.
• Employing trailing stops (e.g., ATR levels) to capture extended reversals after strong fake-outs.

Final Thoughts

The Fake-out Reversal combines the illusion of a breakout with the confirmation of failure, allowing traders to capture momentum when trapped participants may choose to exit. Structured stop placement at the failed breakout zone and clear profit targets at opposing levels are logical exits to consider.The psychology is rooted in market participants’ vulnerability — breakout traders caught on the wrong side are forced to close, enabling an increase in momentum in the reversal direction.As always, confluence factors such as volume spikes, higher timeframe trend alignment, and time-of-day/session context can add confidence in the likelihood of a reversal.Review your own charts across multiple timeframes and assets for examples of false breaks. Marking these and watching how often they lead to strong reversals could provide clues as to what to include as trading plan criteria.

Forex, index and commodity CFD markets are technically open 24 hours a day, but in terms of market action, not all hours are the same. We can see wide variations in liquidity, volatility, and opportunity depending on which global financial centres are active and the key assets being traded. For intermediate traders, understanding and adopting session dynamic thinking can help you anticipate when volatility will increase, when liquidity will shift, and how market psychology changes from one session to another. Rather than your strategies fighting against these market character variations, you can make efforts to align with them. Adapting your trading approaches during the windows when markets are most likely to provide structured opportunities for whichever strategies you choose to use.

Why Sessional Awareness Matters to Traders

Although trading never stops, it’s misleading to think the market is evenly active. The depth of orders resulting in increases in trading volume, the aggression of institutional flows, and the behaviour of price can all depend on the time of day.

• Liquidity: Liquidity isn’t evenly distributed throughout the day. At quiet times, spreads may widen and levels hold more easily. At busy times, volume surges, spreads tighten, traders clamour to position, and key levels are more likely to break as new information is processed.
• Volatility: The price moves differently depending on the session. Asia often tends to consolidate, London often ignites trends, and data releases and Wall Street trading flows associated with the New York session result in changes in volatility as markets recalibrate.
• Market psychology: Much of the sessional character can be (arguably) influenced by the fact that each region has different participants with their own unique priorities that can change the “tone” of the market. e.g. Japanese and other Asian country exporters, European banks, US fund managers and major institutions.

Characteristics of the Three Major Sessions

1. Asian Session (Tokyo & Sydney)

• Hours (GMT): 11 pm – 8 am
• Key markets: JPY pairs, AUD, NZD, Nikkei, ASX, commodities linked to Asia-Pacific (iron ore, gold during Asian hours).
• Personality: Quiet, range-bound, thinner liquidity.

Characteristics and behaviour:

• The Asian session often creates tight price ranges that act as reference points for later sessions.
• Institutional participation is lighter compared to London and New York, so breakouts are less frequent.
• Despite the “calmer” nature, price moves can still occur, especially as a result of a major regional catalyst like Bank of Japan policy changes, Australian employment data, or Chinese economic releases.

Trading Opportunities:

• Range trading: Support and resistance levels that form in Asia tend to hold throughout the session once established. This could make it ideal for mean-reversion setups.
• Position building: Some traders may choose to pre-position ahead of London, placing smaller trades at the edges of Asian ranges in some expectation of a bigger move when Europe opens.
• News spikes: Watch for scheduled releases like BOJ statements, Chinese PMIs or GDP numbers, which can briefly shake up the otherwise relatively calm price action state. Vigilance to stay abreast of when such potentially globally impacting economic data is due can be a worthy part of your daily routine as you start your trading day.

Asian Session Risks and Psychology:

• False breakouts are common in markets where thin liquidity is in play.
• Premature exits may be triggered due to stop hunts near Asian highs/lows, especially as in lower volatility environments, traders may be tempted to place stop loss levels closer to price action.
• Asia can be thought of as the market’s “warm-up” for the whole trading day. Moves may be modest in comparison to other sessions, but they may leave footprints (ranges, levels) that London and New York can later react to.

2. London Session

• Hours (GMT): 7 am – 4 pm
• Key markets: GBP, EUR, CHF, European indices (DAX, FTSE, CAC40). LME open for commodities
• Personality: Higher liquidity is evident as more traders enter the market and increased institutional flows occur with sharper volatility and velocity in price moves.

Characteristics and behaviour:

• The London open (8 am GMT) often sets the day’s tone. Big banks and funds influence market activity with overnight orders.
• Breakouts of the Asian trading range may be common and attractive to traders looking for the start of new trends
• UK and Eurozone economic data is typically released early in the session, sparking more trading interest with repositioning and recalibration of expectations and valuations across a range of asset classes. Influence on US index futures, CFDs, and metals prices may also be seen.

Opportunities:

• London Breakout: Traders can mark Asian session highs/lows and trade the breakout when London flows in.
• Trend days: If momentum increases throughout the session, London can essentially kick-start moves that may then persist into the New York open.
• News trades: UK GDP, Eurozone inflation, or ECB statements often act as triggers.

Risks and Psychology:

• The London open can be extremely volatile. Breakouts may reverse quickly as early enthusiasm wanes if trading volume is not sustained. This could be evidence of a lack of conviction in some price moves.
• Even though spreads may narrow, stops can still easily occur due to fast swings in price compared to the end of the Asian session.
• London traders are generally thought of as more aggressive, and strong intraday price moves may be established. The increased liquidity often means moves are more reliable but also may be faster, meaning hesitation could be costly.

3. New York Session

• Hours (GMT): 12 pm – 9 pm
• Key markets: USD, Wall Street indices (S&P, Dow, Nasdaq), commodities (oil, gold).
• Personality: Event-driven, volatile, may often whipsaw, particularly around the midpoint of the session or if there is middle-of-the-day news, e.g., Fed interest rate decisions.

Characteristics and behaviour:

• The New York open (12–2 pm GMT) often sees strong moves as US traders react to overnight developments.
• High-impact economic data, e.g. CPI, Non-farm payrolls, are released during the early part of the New York session, usually an hour before equity markets open. This can not only produce sharp swings pre-market but also see an exaggeration of these once the equity market opens at 9.30 am.
• The London–New York Overlap is noteworthy. This is when trading volume is at its highest, and this overlap can often deliver the day’s largest directional moves. With European markets closing around the midpoint of the US trading session, this may explain to some degree the change in trend direction that often occurs around this time.

Opportunities:

• Continuation trades: If London markets have established a trend, then New York will often extend this, particularly if US data releases are consistent with the prevailing trend.
• Reversals: US traders sometimes fade (pull back) on London moves if there is the perception of mispricing with indicators suggestive of being overbought or oversold.
• Event trades: US data releases can provide clear catalyst-driven setups as markets recalibrate to new information.

Risks and psychology:

• Price action can be whippy intra-session, with intraday reversals catching trend-followers off-guard.
• Key news, both expected via data or less predictable potential US policy announcements, can override technical setups in a heartbeat. Trail stops are invariably justified, and pre-emptive action before data release may be worth consideration.
• New York price action reflects both institutional momentum and speculative short-term trading with high volume. It can provide big moves, but traders need to exercise some flexibility as sentiment may change quickly.

SessionHours (GMT)PersonalityBest StrategiesKey RisksAsian (Tokyo/Syd)11 pm – 8 amQuiet, range-boundRange trading, pre-London setupsFalse breakouts, low liquidityLondon7 am – 4 pmVolatile, trendingBreakouts, trend trades, newsFast swings, stop-outsNew York12 pm – 9 pmEvent-driven, mixedContinuations, reversals, eventsWhipsaws, news overridesOverlap12 pm – 4 pmMost volatile/liquidMomentum, event trading, breakoutsSlippage, execution stress

Example Trading Approaches by Session

1. London Breakout of the Asian Range

• Logic: The Asian session creates a box (high and low). When London opens, liquidity surges and price often breaks out of this range.
• Execution: Mark Asian highs and lows on your chart. Enter long if London breaks above the Asian high with momentum, consider a short trade if it breaks below.
• Confirmation: Volume spikes or a strong candle close beyond the range.
• Risk management: The stop placement is often just inside the opposite side of the range.
• Psychology: Requires patience, many traders get chopped by false early moves, so using other indicators for confluence may be prudent

2. London Open Reaction

• Logic: The first 30–60 minutes of London can produce false moves as overnight orders are filled.
• Execution: Instead of trading the immediate breakout, wait to see whether the first push holds or reverses. The breakout and retest approach may offer some more robust confirmation of a move that may be sustained. Trading price reversion to a previous state with false breakouts as prices move back into the trading range may also be worth looking for as a potential set-up.
• Example: If GBP/USD spikes down on open but fails to hold below Asian lows, a long trade back inside the range may be cleaner.
• Risk management: Use stops that are consistent with key levels
• Psychology: Having the discipline to avoid chasing the first candle and waiting for confirmation may be worth consideration, and seeing this as more important than perhaps the fear of missing out on a few extra pips in a less certain trend move.

3. Overlap Momentum

• Logic: During the London–New York overlap, trends are strongest. If the price breaks a level here, the continuation probability is higher.
• Execution: Trade breakouts, particularly subsequent to data releases during the overlap, can be significant. Entry is based on being decisive on evidence of continued momentum.
• Tools: Shorter timeframes (M5/M15) with VWAP or volume confirmation may be considered, not only for entry but potentially for timely exits.
• Risk management: Use of aggressive trailing stops and /or partial closes may help lock in some profit as price moves in your desired direction. Reversals can be sudden, and there is a strong chance of giving significant portions of profit back to the market without these approaches.
• Psychology: Fast execution and confidence to follow through on your pre-planned trading system are critical. Hesitation can mean both missed entries and poorly timed exits.

4. Fade the New York Afternoon

• Logic: After the midday close of the European markets and a lessening in momentum as the New York close comes into sight, intraday traders will often square positions, leading to reversals from early trading day extremes.
• Execution: Identify when the price has extended far from the session mean. Look for signs of exhaustion (candlestick rejection, momentum loss) and move back into Bollinger bands after a foray outside the upper or lower bands.
• Example: If EUR/USD rallies all day but stalls near resistance during the afternoon session in the US, a potential mean reversion may be on the cards.
• Risk management: Smaller trade sizes may be prudent as liquidity falls and the chance of rapid reversals increases.
• Psychology: Although patience is key in using trails and logical profit targets to enable profit to run, don’t be tempted to ride the potential for further moves up if there is some evidence that reversal signs may be increasing.

Key Considerations for Session Trading

• Time zone alignment: Always convert session opens into your broker’s server/platform time. Mistakes here cause mistimed trades. Give our support team a ring if you need clarity on when this happens, and of course, take into account changes in daylight saving time.
• Volatility filters: Use ATR to size stops and targets differently by session. A 20-pip stop may be fine in Asia, but it may be far too tight for the London session price action.
• News awareness: Many moves are data-driven. Never enter blindly around a scheduled release and have a pre-planned approach for exit, e.g., close before data, partial close, ride it out, that is right for your individual risk profile and trading objectives.
• Lifestyle fit: You don’t have to trade all sessions. Many successful traders specialise in one (e.g., London mornings or New York overlap), trading should aim to add to your lifestyle, not dictate it.

Final thoughts

Trading isn’t only about setups; it’s arguably equally important to consider timing. Developing a greater understanding of the individual maturity of global trading sessions, traders can anticipate when liquidity and volatility are likely to rise and fall, structure trade planning accordingly, and better mitigate the risks associated with these changes in market action through the trading day.Make your trading approaches not only right for respective market sessions but right for you. You can choose to master one session and then expand or trade all these accounts for changes in approach within your trading plan. As with most trading approaches, the key to sustainable positive outcomes is consistent measurement. Looking at trades and strategies by session may give clues as to what you can refine.

Before a trader defines their strategy or chooses their markets, they must decide how they plan to conduct themselves. A trading strategy should be underpinned by a set of standards and behaviours that guide every decision and approach. Establishing professional standards can provide a framework for consistency and personal accountability, and give you a better chance of improving your trading outcomes.These standards should form one of the first and most important sections of any trading strategy, serving as a personal code of conduct that you can return to in times of uncertainty and something you can align with at the start of a trading day.Review these standards often, reword them to fit your natural way of thinking, and take ownership of them!

1. Discipline

I act in the market according to my written rules, not my impulses. Without trading discipline, even the best strategy can break down. Sticking to predefined criteria helps to remove emotion from decisions on entry and exit. Although this is a crucial standard in developing consistency, discipline is a symptom rather than a cause. You will still need to explore the underlying cause if you often find yourself straying from your plan.

2. Risk Management

I risk only what is appropriate for my account size, experience, and market conditions. Protecting capital and managing profit risk (the amount you give back to the market if it moves in your desired direction) should always be a cornerstone of any planning.Appropriate position sizing relating to account size (e.g., 1% if leveraged trading) and some awareness and adjustment of this, are also worth consideration in specific trading plan criteria.

3. Evidence-Based Refinement

I measure, evaluate, and adapt based on performance data, not hunches or whims. The need for consistency in action is at the basis of effective performance measurement. You will only be able to determine the success of trading approaches and your trading plan if you actually trade it. Improvement comes from analysing trade results, including the success of various strategies, instruments, and timeframes.To close the circle through refinement according to these results is the final step in this cyclical approach to ongoing improvement in outcomes.

4. Trading Patience

I wait for high-quality setups that align with my plan. Overtrading only exposes me to noise and weakens my trading edge. It is not so easy waiting for the market to respond as you think it should. The ‘itchy-trigger” syndrome of premature entry is commonplace for many traders, but often that move you expect fails to materialise and results in a trade that moves against you.Waiting for complete candles to confirm a breach of a resistance level and ensuring all entry criteria are met are two key things to work on. This may mean sitting through an entire session without a trade because the right setup defined in your rules has not happened. If so, tomorrow is another trading day and one that may produce the right setup with a desirable result.

5. Transparency and Trading Honesty

I keep records that reflect the truth, wins and losses alike, recognising this is the best way to identify what I must work on to become the trader I can beHonest trade journaling builds personal accountability and highlights where improvement is needed. A painful stop triggered and too much profit given back, caused by ignoring your rules, is still logged and reviewed — that is how you grow as a trader.

6. Professionalism

I treat trading as a business, not as a form of entertainment or gambling. Setting clear overall goals for your trading, managing costs, and reviewing your performance, like any business owner would. Your trading business profit/loss is based on doing the right things consistently, being serious about continuous improvement and refining your interactions with whatever market and trading style you choose to trade.

7. Adaptability

I adjust my approach to market conditions instead of forcing one method into all environments. A breakout system shines in volatile conditions, but in quiet ranges, it may be time to consider alternative strategies, such as mean reversion. Matching strategy to market requires the development of general market awareness, often facilitated through looking at longer timeframes or key market classes as part of your daily trading routine.This is not only important at the start of the day, but also at the start of each new trading session, e.g., the move from Asian into European sessions.Proactive assessment of when markets may change, e.g. key economic data releases, is also a key part of this.

8. Resilience

I remain composed and continue to adhere to my trading plan when faced with losses and setbacks. Every trader experiences drawdowns, but it is resilience that determines who recovers and how rapidly this recovery may be. You may choose to set a standard to provide some “breathing space” to press your psychological reset button.For example, when I hit three consecutive losses, I stop, reset, realign with my plan and return with clarity, rather than potentially compounding errors through frustration and revenge trading behaviour.

9. Competence-Based Progression

I scale my trading in a particular strategy, my trading as a whole, and take on new approaches only when a level of knowledge and competency indicates I am ready. Every move forward in trading activity should be backed up with a defined readiness. If you are considering scaling, this should be specific based on having a critical mass of trades that indicate that your results have some sort of consistency. Taking on new strategies is based on learning and testing at a minimum trading volume initially. There is no race to move forward, but this must be balanced with managing potential procrastination when evidence that you can ramp things up is present.

10. Continuous Learning

I will remain a student of the market. There are no greater lessons that can be gained from how I am trading in reality to identify those things I need to work on nextComplacency will end progress towards the trader you can become. Continuous learning will keep you sharp and should be planned. Each month, look for new insights, tools, and strategies and record milestones to offer motivational evidence that you are progressing.

Final Thoughts

Professional standards should not be viewed as optional extras; they should be explicitly stated and used in reality to measure behaviour. These should be your foundation on which all trading planning and your long-term success can be built. They should be articulated in the first section of your trading plan and will set the tone for how you will operate in every market condition. Your strategies may change, and markets will always evolve, but a trader guided by the standards covered in this article has the chance to grow and positively influence their trading outcomes.

What Is the Break and Retest?

The “Break and Retest” is a common price action setup based on two important principles:

1. The tendency for prior resistance to become support, and prior support to become resistance.
2. Several key-level breakout price moves will offer a challenge to the strength of a move by retesting the key level just breached, before continuing a move in the breakout direction.

Psychologically, this price action indicates market control as the breakout is confirmed, and a new trend may be in play. Essentially, the retest level can be thought of as a battleground. It is asking questions of the conviction of a potential sentiment change, so a new directional move can begin.

Bearish Break and Retest

A bearish setup occurs when support is broken to the downside, and price then retests the former support level, which now acts as resistance.This reflects an inability of the buyers to force price back above the broken level, while the sellers use the retest and subsequent continuation to confirm the move

• A: Break → price pushes decisively below a support level, showing strong seller control.
• B: Retest → price rallies back to the broken support, which now holds as resistance.
• C: Confirmation → the retest is rejected, and a bearish candle close beneath the low of the initial breakout candle is seen. This pattern suggests buyers are unable to reclaim the level, confirming that the balance of power remains with the sellers.

You can see a real chart example of this on the 4-hourly USDJPY, where a previous support level was breached, then retested before the confirmation of a downwards continuation was seen.

Bullish Break and Retest

A bullish setup occurs when resistance is broken to the upside, and price then retests the former resistance, which now acts as support.This sequence reflects sellers being unable to force price back below the broken level, while buyers use the retest to confirm the move.

• A: Break → price surges through resistance, showing strong buyer conviction.
• B: Retest → price pulls back to the broken level, which now holds as support.
• C: Confirmation → the retest of the key level is rejected, and a bullish candle close above the high of the initial breakout candle is seen. This pattern suggests sellers are unable to reclaim the level, confirming that the balance of power remains with the buyers.

You can see a real chart example of this on the daily gold futures CFD (XAUUSD), where a broken resistance level is retested prior to seeing uptrend confirmation with the price breaching the initial breakout candle high.

Stop Placement and Exits

Risk management for the Break and Retest often focuses on the retest zone itself:

• For bearish setups, stops are commonly placed just above the retest candle high of the original support zone.
• For bullish setups, stops are typically set just below the retest candle low of the previous resistance zone.

Profit-taking exit approaches can include:

• Using fixed risk-to-reward targets, often 2:1 or better.
• Profit targets may be set near the next key level in the direction of the new trend
• Employing trailing stops to capture extended runs after strong breakouts.

Final Thoughts

The Break and Retest combines a decisive breakout move with a clear technical retest and confirmation, allowing traders to join a trend at a defined confirmation point with structured and logical stop placement.The psychology is rooted in how market participants react to broken levels and the desire to see conviction before committing to increases in volume and momentum.This setup is commonly used by many traders as it avoids “chasing” the first breakout candle and offers a new and potentially stronger confirmation of the robustness of a new trend. As always, confluence factors such as increased volume, overall trend direction, and proximity to other key market levels can add confidence in the potential for continuation of the price action move.If you want to take the first steps on adding this to your trading toolbox, have a look at charts and see the frequency of this scenario, as well as track charts that exhibit this move to see what happens next.