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Fading the failed breakout of the London first hour range on M5

different from the Asian range stuff, this one uses the first hour of London as the box, so roughly 07:00 to 08:00 GMT. After that hour I have a high and a low, and from about 08:00 until late morning I'm looking for one thing: a break out of the box that fails. If price breaks the high by a few pips, can't hold it, and an M5 candle closes back inside, I fade it back toward the opposite side. Stop goes beyond the failed extreme. Target is the box low, and I usually take most of it at the midpoint since that's where price likes to hesitate.

It doesn't work on trend days, obviously. The tell is momentum on the break. If the breakout candle is huge and the next one follows through with almost no wick, I don't fade it. I only fade breaks that look tired, small bodies, overlapping candles, wicks on top. Been using it mainly on EURUSD and EURGBP where ranges are more polite.

Quick add on how I size the stop here. Beyond the failed extreme sounds simple, but on EURUSD the wick above the box can be quite long. If the distance from my entry to that wick high is more than about half the height of the box, I pass, because the reward to the box low no longer makes sense. The trades that work best are where the break was small and stalled close to the box high, so the stop is tight and the box low is a clean two times away or better.

A few people messaged me about EURGBP. It works there too, but the box is often tiny, so I use the same rule as for tight boxes on EURUSD and stay away when it is unusually narrow. The other thing with EURGBP is spread. A two pip box with a one pip spread is not a trade, so I only look at it on days when the first hour range is at least normal size. Honestly most mornings I only end up looking at EURUSD and that is fine.

Another filter I forgot to mention. I check whether the break of the box happened into an obvious level from the day before, like yesterday's high or a round number. When the box high and a higher timeframe level sit close together and price pokes through both and stalls, that is my favourite version, because there is a clear reason for buyers to get trapped. When the break is into empty space with no level nearby, I am a lot less keen and usually just watch it play out.