How to Classify the London Profile
Most retail traders look at the London session and see price action. System traders look at the London session and see a classification decision. This is the exact method — step by step.
Why London determines NY
The most common mistake a new XAUUSD trader makes is to treat each session independently. They analyse NY. They set their bias from NY price action. They pattern-match on NY candles. And they wonder why their win rate plateaus at 40 percent no matter how many hours they study.
The reason is that NY does not happen in a vacuum. What London did in the preceding four to five hours determines whether NY is going to trend, reverse, or chop. Miss that context, and you are reading the wrong book.
The AMD framework — Accumulation, Manipulation, Distribution — explains why. Asia accumulates, building the initial range. London manipulates, sweeping a key level or faking a direction. NY distributes — it produces the day's genuine directional move. Every NY setup is reading London's footprint. If you do not classify London correctly, you cannot read what NY is about to do.
Every system trader needs a reliable classification procedure. This is ours.
The three questions
London profile classification reduces to three sequential questions. The answers in combination map to exactly one of five profiles.
Q1. Did London take out the Asia high, the Asia low, both, or neither?
Q2. If London swept a level, did it reverse hard back through it or did it hold beyond it?
Q3. Did London trend to a named level (previous day high or low) and stall there — or did it drift with no obvious destination?
Run these questions in sequence and you arrive at a profile. The answers are binary at each step — you are not guessing, you are looking at candles within session boundaries.
The five profiles
Rule 1 — Tight/compressed range
London trades quietly within or just inside the Asian range. No sweep. No trend. No narrative. The range is compressed relative to the day's average range. Often it looks like nothing has happened.
This is the highest-confidence NY setup. Compressed London activity means liquidity is sitting on both sides and NY has not yet revealed its hand. Institutional flow hitting that compressed structure tends to produce a clean, sustained directional move.
Implications: Full position size. Minimum A+ scorecard threshold of 4. Bias derived primarily from H4 structure and M5 EMA 200.
Rule 2 — Sweep and reversal
London runs through the Asia high or Asia low, then reverses sharply back through that level. The spike was a stop hunt. The real direction was the reversal.
Reading this is critical: if London swept up through Asia high and reversed down, NY bias is short. If London swept down through Asia low and reversed up, NY bias is long. The bias is the reversal direction, not the sweep direction.
The swept level becomes the TP2 reference for NY — NY tends to distribute back to the swept liquidity.
Implications: Full position size. Minimum A+ threshold of 4.
Rule 2C — Sweep and continuation
London spikes through a named level — usually the previous day high or previous day low — and holds beyond it. This is breakout confirmation, not a stop hunt.
Rule 2C is the opposite interpretation of the same price action that produces Rule 2. The tell is whether London returns through the level or whether it stays beyond. If it holds, the swept level is now confirmed support (on a long) or confirmed resistance (on a short). NY is going to distribute in the direction of the break.
Critically, with Rule 2C the TP2 target is not the swept level itself — it is the next named level beyond the break. You have already used the old level as entry context.
Implications: Full position size. Minimum A+ threshold of 4.
Rule 3A — Trends to named level
London trends steadily to previous day high or previous day low, and stalls there. The direction is clear, but the move has already happened — the easy distance is gone.
NY can still trade this setup, but with reduced conviction. The named level is now acting as resistance or support, and any continuation will be harder-earned. Risk needs to be scaled down accordingly.
Implications: Half position size. Minimum A+ threshold of 6. The scorecard bar is higher because the setup context is weaker.
Rule 3B — Drifts with no target
London drifts without obvious direction, hits no meaningful level, and reveals no clean narrative. The structure is blurry.
Rule 3B is the hardest profile to trade because the NY bias is ambiguous. The rule is strict: either produce a 7+ A+ scorecard score and identify a clear liquidity target — or skip entirely. In practice, most Rule 3B days become skips.
Implications: Half position or skip. Minimum A+ threshold of 7.
Rule 4 — Whipsaw
Multiple reversals inside London. Both sides of Asia get swept. No directional resolution. The chart reads like noise.
Rule 4 days are automatic no-trade regardless of any scorecard score, any entry pattern, any apparent setup. The session is fundamentally unreadable and NY will typically continue the same incoherent behaviour.
Close the charts once the OR forms. There is a full article on why Rule 4 days destroy retail traders — it is worth reading before you try to override this rule.
How to read each profile on the chart
Classification depends on being precise about what counts as "London" on your chart. A few mechanics:
- Use session boxes. Tokyo, London, and NY session boxes on the M5 chart eliminate the guesswork. London is orange on most conventions; Asia is blue; NY is green.
- Read candles within the box boundaries only. Do not infer London's direction from the EMA slope or from H4 context. Look at the candles inside the London box.
- Check both high and low of Asia. A sweep of one side while the other remained untouched tells a different story than a sweep of both.
- Classify once, not continuously. The profile is fixed at the close of London, roughly 12:00 UTC. Do not revise it as NY unfolds.
Where traders go wrong
Three recurring errors:
- Confusing Rule 2 with Rule 2C. The distinction is whether the swept level holds or rejects. If London spikes through Asia high and trades back down under it, that is Rule 2 (reversal). If London spikes through Asia high and holds above it for the remainder of London, that is Rule 2C (continuation). Misreading this inverts the NY bias.
- Trading Rule 3B. The rule exists for a reason. "No clear narrative" is a signal to stand aside — but it is also the setup that most tempts discretionary override because the chart looks "interesting". Interesting is not a setup quality.
- Taking Rule 4 trades. Rule 4 is the ultimate loss-prevention filter. Whipsaw London produces whipsaw NY. The session does not become readable because you want it to.
The free visual guide
Verbal classification is useful. Visual classification is faster. The free London Profiles guide below includes annotated chart examples of each profile — Rule 1 compressed, Rule 2 sweep-reversal, Rule 2C sweep-continuation, Rule 3A trend-to-level, Rule 3B drift, Rule 4 whipsaw — with the exact classification logic applied to each.
Once you have trained your eye on the visual patterns, classification becomes automatic. That is the goal.
The Four London Profiles — Free Guide
The exact classification framework referenced throughout this article. Visual examples of each profile, the position-size rules, and the score thresholds that govern them. No spam, unsubscribe anytime.
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