Trading the London lunch lull on GBPUSD: the cost problem

[FXS London Scalper]

Between about 11:30 and 13:00 London time GBPUSD often goes quiet. It's tempting to think the quieter tape suits mean reversion. The arithmetic is less kind.

A worked example:

• The lunch range is often 10 to 15 pips for the whole period, so a normal 6 pip target needs a move of half the range.
• False breaks of the morning high or low are common, which sounds good for fades, but fades also stall, and many trades would end at a time stop for a fraction of a pip.
• Costs stay the same while the move size shrinks. At 0.8 pips per round turn for spread plus commission, a 5 pip average winner loses 16% to costs.

In the morning the same 0.8 pips is maybe 8% of a 10 pip winner. So the same setup needs a noticeably higher win rate at lunch to break even.

There's also an attention cost. The US data at 13:30 is often the better opportunity, and lunch is when you'd want to review the morning and prepare levels for New York.

If you want to test it, tag lunch trades separately in your journal and compare R per trade against morning trades on the same setups. A couple of months should show whether it's worth the effort.

Does anyone trade the London lunch with a positive result? What pairs and targets?