Wednesday AUD/JPY strategy — this trading system exploits the certain tendency of AUD/JPY currency pair (Australian dollar vs. Japanese yen) to be statistically bearish during the pre-last hour before the rollover interest is applied on Wednesday. The particular day of the week was chosen because on Wednesday the rollover is tripled compared to normal days (Sunday and Saturday interests fall on Wednesday). It's unknown why AUD/JPY, a pair with a traditionally positive rollover interest, is sold 1-2 hours before the overnight swap is applied. Perhaps, traders (hedge funds) with big bullish positions prefer this time to partially close their positions without bothering the markets too much.
- Fundamental base for trading.
- Very simple strategy.
- Statistically perfect.
- Only one trade per week.
- Jump-like changes in the interest rate may affect it.
- Trade only on Wednesdays.
- Open an hourly chart of AUD/JPY pair.
At 15:00 EST (GMT-5 or GMT-4 during daylight saving time) open a Short position.
No stop-loss or take-profit.
When the new bar opens (16:00 EST) close your position.
Wednesday 2009-10-14 Wednesday 10-21
Wednesday 2009-10-28 Wednesday 2009-11-04
The H1 bar that occurred on 15:00 EST is marked with the red ellipse. The statistical gain from selling during that hour was 400 pips after 44 weeks. That's ~9.1 pip per deal, which is above the average spread for AUD/JPY (5 pips). Of course, there are some Wednesdays when the strategy results in a loss, but in a long run, it's profitable.
Looks real good in the tester. Very crude backtest 1/1/01 to 11/23/11. Not bad!!!!!