How to Trade the London Session Using Smart Money Concepts (SMC)
ACY Securities - Jasper Osita
Goal of This Lesson
To help you master the London trading session using Smart Money Concepts (SMC)-by understanding its unique dynamics, applying the right setups, knowing which pairs to focus on, and avoiding common traps.
By the End of This Lesson, You Will Be Able To:
- Know why the London session is crucial for SMC traders
- Understand which currency pairs are most active and liquid
- Identify the most common liquidity patterns and SMC setups
- Apply timing, structure, and confirmation models effectively
- Avoid false breaks and low-probability trades during fake London volatility
What Is the London Session?
The London session runs from 3:00 AM to 11:00 AM New York Time (UTC -4) and is responsible for the highest forex trading volume globally. This is when smart money institutions start executing positions, reacting to overnight Asia data, and positioning before the U.S. open.
Think of London as the “institutional warm-up” before the main U.S. act. It’s aggressive, volatile, and full of opportunity-but only if you respect the timing and structure.
Why SMC Works Best During London
London offers:
- High volatility and deep liquidity: Perfect for institutional accumulation/distribution plays
- Creates the High and/or Low of the Day: Origin of the high and low of the day usually comes from this session
- Clean displacements and Fair Value Gaps (FVGs): Volume-backed moves from real intent
- Session overlap with Asia: Creates excellent traps and inducements
How to Trade SMC During London
1. Wait for the Sweep First (ERL / Asia Range Liquidity / Previous Day High/Low
- Mark Key Swing Levels:
- Asia Session High and Low (6 PM - 12 AM NY time)
- Previous Day High / Low
- Watch for liquidity sweeps on key levels, not just breakouts
- If price sweeps and rejects, this is your first clue that smart money is in
- Wait for 3 AM / 15:00 London Open as volume surges in the market at this time
2. Look for Displacement (Break in Structure + Momentum)
- Wait for key levels to get tested
- Confirm that price breaks structure with strong displacement
- This creates a valid FVG (Fair Value Gap) on M5 or M15
- Either price will manipulate or displace the key level
- Structure must align with Higher Timeframe Bias (H1–H4)
In this case, there are no clear signs of a manipulation for reversal, as price action invalidated the bullish Fair Value Gap (FVG) marked in yellow by closing decisively below it. Following that breakdown, two bearish FVGs, highlighted in red, were formed-further reinforcing downside intent.
Additionally, price is now retesting the previous low, which has been identified as a potential Market Structure Shift (MSS) point. A body close below this level would serve as confirmation of the shift, signaling that the move is likely a true displacement, not a liquidity trap.
3. Confirmation Entry (AMD / MSS / Entry Model)
- Use the AMD model at the Lower Timeframe: Accumulation → Manipulation → Distribution
- Look for Market Structure Shift (MSS) post-sweep
- Entry at M1 or M5 FVG with confirmation gives you precision
Other anticipation entries can be an invalidated FVG marked in yellow once price comes back.
Body close before the market structure shift. The body break is best seen using the line chart.
Best Forex Pairs to Trade in the London Session
| Pair | Why Trade It in London |
| EUR/USD | Deep liquidity, reacts to Eurozone data |
| GBP/USD | High volatility and volatility traps |
| EUR/GBP | Great for range plays and intraday fades |
| GBP/JPY | Momentum-heavy and sensitive to risk sentiment |
| EUR/JPY | Clean structure and breakouts around session open |
What to Watch Out For
- False Breakouts in first 15–30 minutes: Let the sweep happen first
- News Spikes (3:30–5:00 AM NY): Mark red folders, especially UK/EU CPI, PMI, GDP
- Asian Range Traps: If it breaks and doesn’t sustain-watch for reversal
- Liquidity Voids: Avoid trading when price leaves unconfirmed gaps with no structure
- Mid-London Reversals (6:30–7:30 AM NY): Key profit-taking zone before NY pre-market setups
Real-Life Analogy: Don’t Ride the Taxi Before the Streets Are Open
Trading the London session without a setup is like hiring a taxi before the roads open. You’ll sit and burn fuel. But once the London drivers are on the move, the traffic patterns (liquidity sweeps) and GPS routes (FVG + MSS) show you the path to follow.
Sample Routine for SMC During London
| Time (NY) | Action |
| 2:45 AM | Mark Asia Range High/Low + Draw ERL/IRL Zones |
| 3:15–4:00 AM | Wait for sweep + displacement confirmation |
| 4:00–5:00 AM | Look for MSS + entry from FVG or iFVG |
| 5:00–6:30 AM | Manage trade / scale partials |
| 6:30–7:30 AM | Exit or hold into NY Killzone (if bias aligns) |
Strategy Recap:
- Sweep Asia High/Low, Previous Day High/Low
- Displace and Break Structure or Manipulation
- Wait for MSS and Confirmation
- Enter on FVG (M1–M5)
- Target IRL/HTF Levels or 2R–3R
- Trail or Exit Before NY Volatility
Bonus Tip: Use the London Session to Build the Bias
Even if you don’t trade London, use it to:
- Build directional bias for NY session
- Refine key liquidity zones
Final Takeaway
The London session is one of the most profitable windows for trading Smart Money Concepts-but only if you understand its unique tempo. Be patient during the first sweep, don’t chase breakouts, and let the market show its hand before you react.
Trade like the institutions-sweep first, confirm second, and strike only when the setup is clean.
Check Out My Contents:
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Complete Step-by-Step Guide to Day Trading Gold (XAU/USD) with Smart Money Concepts (SMC)
The Power of Multi-Timeframe Analysis in Smart Money Concepts (SMC)
Forex Trading Strategy for Beginners
The Ultimate Guide to Understanding Market Trends and Price Action
Mastering Candlestick Pattern Analysis with the SMC Strategy for Day Trading
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Complete Step-by-Step Guide to Day Trading Gold (XAU/USD) with Smart Money Concepts (SMC)
The Ultimate Guide to Backtesting and Trading Gold (XAU/USD) Using Smart Money Concepts (SMC)
Why Gold Remains the Ultimate Security in a Shifting World
How to Start Day Trading:
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Learn how to navigate yourself in times of turmoil:
How to Identify Risk-On and Risk-Off Market Sentiment: A Complete Trader’s Guide
How to Trade Risk-On and Risk-Off Sentiment - With Technical Confirmation
The Ultimate Guide to Understanding Market Trends and Price Action
Want to learn how to trade like the Smart Money?
Mastering the Market with Smart Money Concepts: 5 Strategic Approaches
Mastering Candlestick Pattern Analysis with the SMC Strategy for Day Trading
Understanding Liquidity Sweep: How Smart Money Trades Liquidity Zones in Forex, Gold, US Indices
The SMC Playbook Series Part 4: How to Confirm Trend Reversal & Direction using SMC
The SMC Playbook Series Part 5: The Power of Multi-Timeframe Analysis in Smart Money Concepts (SMC)
Fair Value Gaps Explained: How Smart Money Leaves Footprints in the Market
Trading Psychology and Continuous Improvement Contents:
The Mental Game of Execution - Debunking the Common Trading Psychology
5 Steps to Backtest a Trading Strategy with AI: A Step-by-Step Guide
Managing Trading Losses: Why You Can Be Wrong and Still Win Big in Trading
The Hidden Threat in Trading: How Performance Anxiety Sabotages Your Edge
Why You Fail in Trading: You Don’t Have Enough Capital to Survive
Why 90% of Retail Traders Fail Even with Profitable Trading Strategies
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This content may have been written by a third party. ACY makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplies by any third-party. This content is information only, and does not constitute financial, investment or other advice on which you can rely.
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