First hour versus last hour of the London and New York overlap

[Fairman]

First hour versus last hour of the London and New York overlap

The overlap is the busiest part of the day, but its first and last hours are quite different markets. The first hour brings a rush of orders, news, and position taking as the US desks arrive. The last hour has people closing positions and fading the day's moves.

Momentum setups tend to work better early, when flows are one-directional. Reversion setups often work better late, when price has drifted from its average and the day's participants are balancing books.

An example: a breakout at 8:45am New York time on a data release has plenty of volume behind it. The same breakout at 11:30am often fails because the people who wanted to buy already did.

The split is not rigid, and news can break the pattern, but treating the two halves as separate markets is a good start. Separate statistics for each half usually reveal differences that a combined average hides.

One caution: scheduled data in the first hour can override any pattern. On a day with a major US release at 8:30, the first hour of the overlap belongs to the data, and the usual split does not apply.

Which half of the overlap suits the strategy better?