The London lunch lull is real, and it is not about lunch

[Fairman]

The London lunch lull is real, and it is not about lunch

Between roughly 11:30 and 13:00 GMT, London traders step away, New York is still waking up, and the market goes slack. Volume falls. Ranges compress. The pair drifts.

A lot of scalpers believe this is the safe time for range trading. It sometimes is, but there is a catch. The compression often ends with a sharp expansion when New York data hits at 13:30. The positions built in the quiet period, with tight stops placed inside the range, get run over by the breakout.

Think about the structure. Range trades in a lull collect small wins at a high rate, and a single violent exit wipes out hours of work. The statistics look great on average and terrible on the worst day.

Careful approach: scale out of range positions before 13:15 GMT on days with major US releases. Closing early costs a bit of expected value and avoids the worst tail.

How many of the largest losses in the last six months came right after a quiet range period?