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Developing a system #22 (EUR/USD wakeup strategy)

Submitted by Chris

EUR/USD wakeup strategy.

This is a strategy I have started to work on and it has shown success.

Working with the EUR/USD on a 5 minute chart I take the high and low from 00h00 to 04h55 London time the hours when the pair are quietest.

I set the Buy at the High + 5 and the Sell at Low - 5 with a 15 S/L.

I have noticed that invariably between 05h00 and the European opening the market wakes up and moves substantially regularly with a 20 pip surge. If there has been a lot of movement between 00h00 and 04h55 I stand aside.

Look forward to your comments.

Chris

PS. Thanks Edward for running such a good site.

Thank you, Chris

as a rule, breakout strategies, like this, which are tailored to certain market hours and based on the behavior of certain currency pairs work quite well. The only requirement is to stick to the money management rules and make sure that rewards are higher than risks.

Let's hear from traders as well.
What hours and breakout methods have proven to be the most effective?

Best regards,
Edward

I use a rather different method. The market is usually quietest at the very end of the day - before 12 midnight. Look 2 hours before the midnight to establish your trading range. Use 5 min chart to find the true range borders.
Don't lock yourself to 2 hours data limit strict, if the range is better seen within 3 hours period before the midnight, use 3 hours data instead.

Then trade the breakout +10 pips the following day.

Alex

I somewhere read that experts use the first 5 minute price range as the resistance and support zone for the rest of the day should the market come back to test it. Could be used for scalping, I guess.

Thank you Edward and Alex for your comments.

Over the past month I have traded the GBP/USD and the EUR/GBP crosses at the same time as the EUR/USD cross with success, though I agree with you Alex that High+10 and Low-10 is better, as sometimes with a +5/-5 I have been into a trade too early.

I am building some evidence to see how the strategy works

Chris

It's quite similar to the Panca Eagle strategy

i see this system as a very good system when price moves at a direction at the wake of the 5hr bar. the problem i see with this system is if price moves in a zigzag pattern on in a choppy manner which is sometimes possible in some months.

I have tried a similar system like this in this forum (early morning breakout) it worked very well for some months and in the next few months ahead i experienced lots of unstable price direction which always hit the S/L and most times triggered both buy and sell orders.

Anyway this system is on a 5min chart and i hope it'll be different.

Thanks Chris