What Is This Setup
The Full Engulf setup is a statistically validated trading edge based on how the London session behaves relative to Asia — and what that predicts for the New York session.
The Core Idea
On days when London trades both above Asia's high AND below Asia's low, the London session has "fully engulfed" the Asia range. When this happens and price opens the NY session in the lower half of that London range, there is a statistically significant probability that price will sweep the London Low before making any meaningful move higher.
ASIA SESSION 8:00 PM – 3:00 AM ET ← sets the initial range
LONDON SESSION 3:00 AM – 8:00 AM ET ← must engulf Asia
NY SESSION 8:00 AM – 4:00 PM ET ← where you trade
London High > Asia High
AND
London Low < Asia Low
Both conditions must be true. London swallowed the entire Asia range on both sides. This is the prerequisite for everything else.
81.2%
Lower 50%
hits low first
88.9%
Lower 25%
hits low first
Backtested on 2 years of NQ1! 30-min data. 85 qualifying days found out of 642 total trading days.
When London breaks below Asia's low, it creates a cluster of stop losses and unfilled orders just below that level — and below the London Low itself. Large institutional players know these levels exist. The NY session open is when that liquidity gets targeted. Price acts like a magnet toward the London Low because there is a concentration of orders sitting there waiting to be filled. Once that liquidity is swept and the orders are filled, price finds its real bottom and can reverse. This is why the long trade after the sweep is often the highest quality entry — you're entering after the "cleanup" has already happened.
What This Is NOT
The planner is not a signal generator. It does not tell you the exact candle to enter on. It calculates the key price levels for the day and tells you the statistical lean. Price action at those levels is what determines your actual entry timing.
Does Today Qualify?
Run through all three gates before 8am ET every morning. All three must pass. If any one fails — there is no trade today using this setup.
1
Did London trade ABOVE Asia's High?
Look at the highest point London reached (3am–8am ET). Did it exceed the highest point Asia reached (8pm–3am ET)?
London High > Asia High → PASS ✓
London High ≤ Asia High → FAIL ✗ — Stop here, no trade today
2
Did London trade BELOW Asia's Low?
Look at the lowest point London reached. Did it go below the lowest point Asia reached?
London Low < Asia Low → PASS ✓
London Low ≥ Asia Low → FAIL ✗ — Stop here, no trade today
3
Is price below the London Midpoint at exactly 8:00am ET?
Calculate: London High + London Low ÷ 2 = Midpoint. Where is the 8am opening price relative to that midpoint?
8am price < Midpoint → PASS ✓ — You're on watch
8am price > Midpoint → FAIL ✗ — Edge does not apply today
All Three Pass? Check One More Thing.
Once qualified, check if price is also below the Lower 25% threshold. This tells you your conviction level going into the trade.
Price at 8am is below the lower 25% threshold
Formula: London Low + (London Range × 0.25)
88.9% probability London Low gets hit first.
Highest conviction. Only 2 exceptions found in 2 years of data.
Price at 8am is below the midpoint but above the lower 25% threshold.
Formula: London Low + (London Range × 0.50)
81.2% probability London Low gets hit first.
Still very strong. 3 out of 4 days the low gets swept.
Important: Partial Engulf Days Do NOT Qualify
If London only broke one side (above Asia High but not below Asia Low, OR below Asia Low but not above Asia High) — that is a partial engulf. The statistical edge only applies when BOTH sides are broken. Do not use the planner levels on partial engulf days. They carry no statistical weight.
The Five Levels
Once you run the planner, five levels are calculated. Understand exactly what each one means before you draw it on your chart.
| Level | Color | What It Means | How You Use It |
|---|
London High |
Gold |
The highest point London traded. The ceiling of the entire setup. |
Long Target 2. If price reaches here, the flush is completely over and bulls have full control. |
Upper 25% |
Grey |
Three quarters of the way up the London range. |
Reference only. Not an entry or target level for this setup. |
Midpoint (50%) |
Blue |
Exact middle of the London range. The dividing line between bullish and bearish lean. |
Long Target 1. Take partial profits here after the sweep. Also the qualification line — price must be below this at 8am. |
Lower 25% Line |
Red |
One quarter of the way up the London range. |
If 8am price is below this line, you have the A+ setup with 88.9% probability. It's a conviction indicator, not an entry level. |
London Low |
Gold |
The lowest point London traded. The single most important level on the chart today. |
The magnet. Short target. Long entry trigger. Everything revolves around this level. |
The One Level That Matters Most
Of all five levels, the London Low is the only one you need to actively watch during the NY session. Everything else is context and targets. Draw all five on your chart, but keep your eyes on the London Low.
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✗
When exactly to enter
The planner gives you the WHERE. Price action gives you the WHEN. A level being touched is not an automatic entry signal — you need a confirmation candle.
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✗
How far price will go after the sweep
The stat tells you the low gets hit first. It does not guarantee a large reversal after. Always use predefined targets and don't get greedy.
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✗
Your position size or risk amount
The planner calculates R:R ratios but not dollar risk. You determine how much you're willing to lose on any single trade before entering.
How to Enter Trades
Two trades are available on qualifying days. You can take one or both. The Long (fade the sweep) is generally the higher quality entry.
SHORT — Ride the Flush
Enter early. Bet the London Low gets hit. Target IS the London Low. Higher activity, more screen time required.
LONG — Fade the Sweep
Wait for the low to get hit first. Enter on the reversal. Targets are Midpoint and London High. More patient, higher quality.
8:00 AM ET
Confirm your setup level
Check where 8am price sits. Below lower 25% = A+ setup. Below midpoint only = standard setup. Note your stop level (above the 8am candle high) before you do anything else.
8:00 – 8:30 AM
Watch for weakness — do NOT jump in immediately
Watch the first 1-3 candles on the 5-minute chart. You want to see: price fails to rally, rolls over, or shows active selling. If price immediately rips higher after 8am — do not chase the short.
Entry Trigger
Break below first swing low after open
On the 5-minute chart: price bounces slightly after open (dead cat), forms a swing high, then breaks back below the prior candle's low. That break is your entry. Enter short on the candle that closes below the swing low.
Stop Loss
Above the 8am opening candle's high
If price is truly heading to the London Low it should not need to reclaim the highs. If it does, you're wrong — get out. Keep the stop tight.
Target
London Low — tighten stop 10-15 pts above as you approach
Do not wait for the exact price print. As you get within 10-15 points of the London Low, tighten your stop significantly or take profit. Price sometimes stalls just above the exact low before the final flush.
8:00 AM – Anytime
Do absolutely nothing — wait for the sweep
The long trade does not start at 8am. It starts when the London Low gets hit. Set an alert at the London Low and walk away. You are waiting for the market to do the work for you.
Alert Fires
Switch to 5-minute chart — watch for rejection
When your alert fires, pull up the 5-minute chart. You're watching for a specific candle pattern: price dips to or slightly below the London Low, then the candle closes BACK ABOVE the London Low. That wick below + recovery close is the rejection signal.
Entry Trigger
Candle closes back above London Low
Enter long on the close of the rejection candle. Do not anticipate it — wait for the candle to actually close above the London Low. That close confirms the sweep is complete and buyers have stepped in.
Stop Loss
Below the wick low + small buffer
Place your stop a few points below the lowest point of the rejection wick. If price takes out that low it means the sweep failed to hold and the move lower is continuing.
Target 1 — Midpoint
Take 50% of your position off here
When price reaches the London Midpoint (already drawn on your chart), close half the position. Move your stop to breakeven on the remainder. You are now in a risk-free trade for the second target.
Target 2 — London High
Exit remainder here or trail stop
Close the remaining position at the London High, or trail your stop behind price if momentum is exceptionally strong. Don't hold past this level looking for more — the edge is exhausted at the top of the London range.
Which Trade Is Better?
The Long (fade) is generally preferred because you enter with confirmation — the sweep has already happened before you risk capital. The Short requires you to trust the stat will play out. Both are valid, but beginners should focus on the long trade only until comfortable with the setup.
Rules to Remember
These rules exist to protect you from the most common mistakes traders make with this setup.
Rule 01
No Qualify = No Trade. Period.
If any of the three gates fail, the setup does not exist today. The levels in the planner carry zero statistical weight on non-qualifying days. Bouncing off the London Low on a non-qualifying day is just coincidence, not edge.
Rule 02
Partial Engulf Is Not an Engulf
London breaking only one side of the Asia range (high OR low, not both) is a completely different setup. Do not apply this system to partial engulf days. The statistics were built on full engulfs only.
Rule 03
The Planner Is a Map, Not a Signal
Touching a level is not an entry. The London Low being touched is not automatically a long entry. You need a confirmation candle — a wick rejection that closes back above the level — before entering.
Rule 04
The Stat Tells You Direction, Not Magnitude
88.9% tells you the low gets swept first. It does not tell you how far price goes after. Always use predefined stops and targets. Do not hold a trade waiting for a larger move just because the stat is high.
Rule 05
Long After Sweep > Short Before Sweep
The long trade entered after confirmation of the sweep is a higher quality trade than the short entered before the sweep. If you can only take one trade, take the long. You're entering with the sweep already confirmed.
Rule 06
Take Partial Profits at the Midpoint
Always take at least 50% of your long position off at the London Midpoint. Move stop to breakeven on the rest. This guarantees a winning trade even if price fails to reach the London High.
Rule 07
Set Your Alert and Step Away
For the long trade, set an alert at the London Low and do not watch the screen. Staring at price before the sweep invites impulsive early entries. The alert will tell you when to pay attention.
Rule 08
Know the Failure Rate Before You Trade
88.9% means 11.1% of qualifying A+ days WILL fail. On those days price won't sweep the low first — it will rip higher immediately. This is why your stop on the short must be respected without hesitation.
Rule 09
80–100% Zone Flips the Edge
If 8am price is in the top 20% of the London range, the London Low was hit first exactly 0% of the time in backtesting. That's a lean toward the highs. Do not use this setup to short on those days.
Rule 10
This Setup Occurs ~13% of Days
Expect roughly 2-3 qualifying days per month. This is a selective, high-quality setup — not a daily trade. Forcing trades on non-qualifying days to stay active is the fastest way to lose money with this system.
Daily Checklist
Run through this every morning before 8am ET. Print it, bookmark it, or memorize it. This is the complete pre-trade routine.
STEP 1 — Get Asia Session Numbers
Find Asia High = highest point from 8pm–3am ET last night
Find Asia Low = lowest point from 8pm–3am ET last night
STEP 2 — Get London Session Numbers
Find London High = highest point from 3am–8am ET this morning
Find London Low = lowest point from 3am–8am ET this morning
STEP 3 — Run the Full Engulf Check
London High > Asia High? YES / NO → Stop, no trade
London Low < Asia Low? YES / NO → Stop, no trade
STEP 4 — Open the Trade Planner
Enter all 5 numbers → hit Calculate
Draw the 5 levels on your chart
STEP 5 — Check 8am Opening Price
Price below Midpoint? YES → On watch / NO → No edge today
Price below Lower 25%? YES → A+ setup (88.9%) / NO → Standard (81.2%)
STEP 6 — Set Your Alerts
Alert at London Low → triggers when sweep begins
Alert at Midpoint → triggers at long Target 1
8:00am Note 8am candle high (stop level)
8:00+ Watch 5-min for weakness
ENTRY Break below first swing low
STOP Above 8am candle high
TARGET London Low
Tighten stop 10-15 pts out
Wait Alert fires at London Low
Watch 5-min rejection candle
ENTRY Candle closes back above Low
STOP Below wick low + buffer
TARGET1 Midpoint → take 50% off
Move stop to breakeven
TARGET2 London High → exit rest
Where is 8am price in the London range?
0–25% from bottom → 88.9% London Low hit first ← A+ SETUP
25–50% from bottom → 81.2% London Low hit first ← STANDARD SETUP
50–80% from bottom → ~40% London Low hit first ← NO EDGE
80–100% from bottom → 0% London Low hit first ← LEAN LONG INSTEAD
The One Sentence Summary
On Full Engulf days where price opens below the London midpoint at 8am ET — the London Low will almost certainly be hit before any meaningful rally, making it the highest probability short target and the highest quality long entry trigger of the day.