When an Asia trend day cancels the London mean-reversion plan
Posted: Tue Oct 20, 2026 9:00 am
Mean-reversion scalpers usually like London opens that follow a balanced Asia session. Price tests the edges and snaps back. The plan breaks when Asia itself trends strongly.
Signs Asia has been a trend day:
- Price has moved more than 50% of the average daily range during Asia.
- Few or no pullbacks larger than 30% of the move.
- Asia closed at or near its extreme.
- Usually driven by news: Chinese data, RBA, BoJ, or a US story from the previous evening.
What happens at the London open on these days:
1. Continuation in the Asia direction is common, as Europe joins the move.
2. A pullback may happen, but fading the Asia trend often gets run over.
3. If there's a reversal, it tends to come later in the day, not in the first 30 minutes.
Adjustment: on Asia trend days, mean-reversion entries in the first hour of London are off. Either switch to trend-following pullbacks or wait until after 09:30 UK to reassess.
How do you adapt when Asia does something unusual?
Signs Asia has been a trend day:
- Price has moved more than 50% of the average daily range during Asia.
- Few or no pullbacks larger than 30% of the move.
- Asia closed at or near its extreme.
- Usually driven by news: Chinese data, RBA, BoJ, or a US story from the previous evening.
What happens at the London open on these days:
1. Continuation in the Asia direction is common, as Europe joins the move.
2. A pullback may happen, but fading the Asia trend often gets run over.
3. If there's a reversal, it tends to come later in the day, not in the first 30 minutes.
Adjustment: on Asia trend days, mean-reversion entries in the first hour of London are off. Either switch to trend-following pullbacks or wait until after 09:30 UK to reassess.
How do you adapt when Asia does something unusual?