LFB London Open Trade Plan

The Taming of the Beast

Purpose of the London Open Trade To determine the price direction of GU at the earliest point possible while maintaining a high probability of success. 5 pm Eastern Time Mark the high & low of current day Check to see where price is in relation to the next days pivot points Put the LFB trade plan levels on your chart during the evening

1 am Eastern Time Mark the high & low channel since the new day began at 5 pm Note the previous days high & low channel & the LFB trade plan 1 am to 2 am Eastern Time Beware of the London Head Fake (sit on your hands) Price will go one direction & then settle into the other direction The central pivot point often determines the ultimate direction of price (if below, price often stays on the short side; if above, price often stays on the long side)

Entry Opportunities The LFB trade plan numbers are usually great entries for this trade & can be used in conjunction with the other two entry opportunities. 10 to 20 pips above/below the previous days high/low channel 10 to 20 pips above/below the 5 pm to 1 am high/low channel When entering, if entry level is reached after a rather long run, wait for a retracement fib the run & look to enter around the 50 r/t. Divide your position into at least 3 smaller positions & take profits along the way at level 1; then level 2; then let one run. Exit Strategy Take profits at level 1 around 50 pips; move remaining lots to B/E +1 Take next profit at level 2 around 100 pips; move remaining lot to level 1 Dont be afraid to take profits.

Indicators at 1 am & 2 am on 5 min chart Note position of candlestick on Bollinger Band Note position of RSI Note position of Stochastic (I also look @ 15; 30; & 60) Note position of MACD Over the next 30 min, you should get an indication of direction. Indicator Check List Indicator Central Pivot 90 SMA Bollinger Band RSI Stoch MACD bars MACD 9 SMA Interrelationship of Indicators The crossing of the stoch is the main indication of direction. Check the position of the stoch on the 30 & 60 min time frames. The position of the RSI is next in importance. MACD keeps you in a trade its always lagging. Observations The 60 min stochastic is a major key to price direction. During consolidation days, wait for the 60 min stochastic to exceed either the 80% line or the 20% line (depending on direction); when the green line crosses the red dotted line & both lines cross the 80 or 20 line, enter the trade. (Be sure to wait!) During consolidation days, the MACD will just hover around the mid-level line. During trending days, the 60 min stochastic will have a cross as described above, but all other crosses in the direction of the trend will not reach the 80 or 20 line. This is when you pay close attention to the MACD to keep you in the trade. Sometimes, the GU move starts during the late afternoon/Asian session, so this may give you a heads-up on direction. But, you have to really be attuned to GU to recognize this aspect. 1 am 2am

Observations continued Strategy works best when there has been a period of consolidation. Strategy is designed to get in and get out/get locked in before the 4:30 am British news releases. There is an ebb & flow to GU that you have to learn to recognize. GU is volatile. Sometimes the LFBs stop loss is too tight. You need to watch price as it approaches the entry. If the 5 min stochastic is reaching the top/bottom of the curve, you may want to wait for a retrace. If price has reached entry, I sometimes enter at a better price on the retrace by waiting for the 5 min stochastic to recycle. Its hard to sit on your hands, but you can lose quickly with GU if you dont learn the sit on hands technique! Developing Familiarity with GU Go to your 1 hour chart Use the rectangle to highlight the entire movement for each day. Make it extend from the high to the low. Make each day a different color. Do this for the past couple of weeks. Look at how price enters each day & the movement it makes lots of volatility and, your job is to find 50 to 100 pips to bank each day. Then, go back to the 5 min chart & pay close attention to the stochastic. Also, pay close attention to the 60 min stochastic. Watch this develop in real time. Never, Never Rules Dont try to trade news releases unless you have a crystal ball. And, if you find a crystal ball that works, please share it with me! The big boys know how they are going to manipulate the market. Their job is to take as many pips away from the little guy (and, some of the other big guys) as possible. When To Be Happy! When you can consistently bank 50 pips each day. How To Stay Happy! Bank the 50 pips; shut off your computer; & dont give them back to the big boys!