The London Open Break & Retest Strategy: Combining Session Pivots with Banana Momentum & eWaves

If you have spent any time trading the European morning session, you have likely noticed a recurring phenomenon: Price has an almost magnetic relationship with the London Open price.

No matter how aggressively the market whips back and forth during the pre-market or opening bell, price constantly gravitates back to, tests, and reacts around the exact opening print of the session (08:00 UK / 09:00 CET).

Why does this happen? The opening price represents the baseline equilibrium of institutional liquidity for that trading day. It is the reference mark from which daily institutional buyers and sellers measure performance, delta, and inventory risk.

Today on DAX (DE30EUR 5-Minute Chart), the market delivered a textbook masterclass on how to combine Session Open Price Action, Banana Super Momentum, and AIMS eWaves Structure to capture an explosive 200+ point Wave 3 drop with minimal drawdown.

The Full Setup Breakdown: Anatomy of a 200-Point DAX Runner

Phase 1: Macro Context & Structural Bias

Before looking for any trigger, professional traders always evaluate market context first.

• Trend Cloud: The Banana Super trend ribbon was red and expanding downward, indicating that sellers had established higher-timeframe control.
• AIMS eWaves: The subwindow histogram was printing below the zero line, confirming negative structural momentum.

Standing Rule: When the macro regime is bearish, do not try to catch falling knives. Align with the flow and look for high-probability sell setups.

Phase 2: The Early Buyer Trap (08:00 – 08:30)

As the London bell rang at 08:00 (marked by the blue London Open line at 26,146.0), buyers made several aggressive attempts to push price upward into higher resistance.

However, because the higher-timeframe structure was firmly bearish, these buyer pushes were absorbed by institutional liquidity. Notice the failure to make new structural highs—a classic sign of momentum exhaustion.

Phase 3: The Structural Breakdown

Around 08:45, selling pressure overwhelmed the bids, and price punched cleanly below the London Open line (26,146.0) (highlighted by the first yellow circle on the chart).

This breakdown proved that buyers could not defend the daily open price. But experienced traders know: Never chase the initial breakdown candle. Chasing breakdowns puts your stop loss in no-man’s land. Instead, wait for the market to come back to you.

Phase 4: The Break & Retest Sweet Spot

Between 09:15 and 09:30, price staged a textbook multi-candle pullback back up toward the London Open price (second yellow circle).

This is the sweet spot:

1. Price pulled directly into the underside of the London Open price line (26,146.0).
2. Price tested the underside of the Red Banana Super Cloud, which acted as dynamic resistance.
3. Buyers were completely rejected, leaving distinct upper wicks at the level.

Phase 5: The Banana S1 Trigger & Wave 3 Expansion

Right at the point of retest rejection, the Banana Super Indicator printed a clean S1 Sell Signal.

Simultaneously, AIMS eWaves flipped back down into accelerating negative momentum, signaling the start of a massive Wave 3 impulse drop.

• Entry: Beneath the signal candle (25,968.5).
• Initial Stop: Tucked safely above the retest high / Banana cloud (25,992.0 — risk of ~23.5 points).
• The Outcome: Price cascaded uninterrupted from 26,146.0 straight down to 25,920.0—a rapid 220+ point impulse run yielding over 8R to 10R risk-to-reward.

The 5-Rule Checklist for the London Open Break & Retest

To trade this setup consistently across DAX, FTSE, NASDAQ, or Forex pairs, follow this 5-step execution checklist:

1. Mark the 08:00 UK Open Price: Draw a clean horizontal line at the exact open price of the 08:00 UK candle.
2. Check Multi-Timeframe Alignment: Ensure the Banana Super ribbon and eWaves histogram agree with your intended trade direction.
3. Wait for the Clean Break: Allow price to clearly displace above or below the open line. Do not anticipate.
4. Look for the Pullback & Rejection: Price must retrace to touch or test the open price line and the Banana ribbon.
5. Execute on the Banana Signal: Enter only when the formal Banana Entry Signal (S1/S2 for shorts, B1/B2 for longs) prints with eWaves confirmation.

Why This Setup Fits Both Discretionary & Automated Traders

What makes the London Open Break & Retest so potent is its objective rule-set. There is no guessing where your stop loss belongs (above the retest high) or where momentum should accelerate (below the break).

In our BananaEA automated trading system, this pattern is classified under the Session Open Price & Structure Filter, ensuring automated bots execute high-probability continuation moves while filtering out low-quality mid-session chop.

Good trading and see you inside the Academy!
— Immy and the iTradeAIMS Team