Generally speaking I do not trade only the London session. However, in a market like today you need to step back and think it through logically.
My whole strategy is based on the idea of every trade being unique and using discretion when trading. Just because a line exists it doesn’t mean you have to trade it. Looking at this trade I said to myself logically:
1) GBP/JPY moves roughly 200-300 pips per day. In the past 24 hours it moved over 400 so it is very possible that its getting exhausted.
2) The Asian session is generally when GBP/JPY becomes more erratic.
3) It is approaching a scalp line (area of support) and an area that has show quite a bit of S+R in the past few months. Given the fact that its probably exhausted and we are in the Asian session this can be a very dangerous area.
To me that sounds like a dangerous trade. If GBP/JPY is tumbling down mid London session still within or only slightly out of its ADR I will enter. With this trade asking myself a few simple questions tole me I should not enter.
Before jumping into any trade I ask myself a few questions like these:
What possible problems could this trade have?
Is this a high or low probability trade and why?
My entering or not depends on the answers to those questions.
On a side note, I have already had 3 emails from people saying that I should just own the loss and not make excuses. Come on guys look back at my posts if its a loss I own it and I do so quickly without hesitation, when its not I explain why I would not have enter.