Which pairs are allowed in my pre-London roster and why

[LondonScalper]

Before 07:00 London I allow myself exactly three instruments. The list is short because early-morning conditions punish broad attention.

EURUSD. It's my main pair, I know how it behaves in the Frankfurt pre-open from 06:00 onward, and the spread on my raw account is usually under 0.3 from about 06:15. It's on the list mostly so I can see the Asian range and plan the London open, but I'll take a trade if it sets up cleanly.

USDJPY. It's still in its own session at that hour, it has real liquidity, and the Tokyo afternoon often sets up useful levels. My pre-London USDJPY trades are slightly better than my London ones, oddly.

Gold. On the list with conditions. Spread must be under a set threshold, and only if there's been a clear Asian range. Gold in thin hours can look calm and then move $8 in a minute.

What's not on the list, and why:

GBPUSD. Spread before 07:00 is often double what it is half an hour later. I wait.

EURJPY and GBPJPY. Crosses before London are where my worst early-morning losses came from. The spreads look fine on paper and then widen at the moments that matter.

AUD and NZD pairs. Their session is winding down. I don't know them well enough at that hour.

Indices. Not my hours, and I've got the scars to prove it.

The list gets reviewed every quarter, but it hasn't changed since spring.

[Shadow Trader]

The gold condition is the one I'd like to hear more about. What threshold do you use for the spread? I've found a fixed number doesn't work well before London, because the normal spread for that hour changes with the price level and how quiet Asia was.

What works for me is relative. Gold is allowed before 07:00 only if the current spread is no more than about 1.5 times its median for that same hour over the last month.

On USDJPY being better pre London, I see the same thing. I put it down to the Tokyo afternoon having done its work, so levels from 03:00 to 06:00 London are cleaner, and there are fewer people trying to force a breakout.

One pair I'd argue for is AUDUSD on days when Australian data has already been released overnight. The move has happened and the pair often settles into a clean range for the European early hours.

I'd be interested to know how your early EURUSD trades compare with the 08:00 ones on average. In my log the earlier ones have a lower hit rate but better reward to risk.

[Shadow Trader]

Thinking about the GBPUSD rule again: spread doubling before 07:00 is true on my account too, but I checked what that means in practice. On a 6 pip target, an extra 0.4 pips of spread is a real hit. On a 15 pip target it's much less important.

So the roster maybe shouldn't be per pair, but per pair and target size. I'd still keep GBPUSD out for scalps of under 8 pips before London, but I've taken a few early continuation trades with wider targets that were fine.

The crosses point I agree with completely. My worst losses before 07:00 were EURJPY too, mostly stop runs during spreads that widened right when price reached my stop.

A question on the quarterly review: what would actually get a pair added? If you only trade the three pairs, you never collect data on the others at that hour.

I keep a paper log for pairs that aren't on my list, just noting the setups I would have taken. After a few months it tells me whether a pair deserves a trial.