Here is a trading system that can produce 100 pips at the European open (8 am GMT) by trading a basket of four currency pairs. Observation of price action reveals that when the EUR/USD pair moves (for example), to too do other currencies that are in synergy with the EUR/USD pair. Why trade only one currency pair when a 25 pip scalp on four synchronized pairs will meet a target of 100 pips. The set up rules are simple, and if followed will produce the desired result.
There are three essential criteria that need to be synchronised for the best possible outcome. They are: 
Example 2. AUD pairs
There are three essential criteria that need to be synchronised for the best possible outcome. They are:
- Choose a currency that is strong against all other currencies for long trades. (Weakest for short trades).
- All chosen pairs are trending in the same direction.
- The 7 am candle for each selected pair on a 15 M time frame are all pointing in the same direction (up for longs and down for shorts).
Here are the strategic steps to follow:
- At 6:30 am (GMT) check the currency strengths using a simple H/L leader list as shown in the two example charts below. Best results are when the currency pairs are grouped together at the top (for long trades) or at the bottom (for short trades).
- Check the major trend using a 30 M chart. Use a 20 M, 50 M and 100 M moving average and daily pivots. Make sure that the four pairs you have chosen are moving in synchronicity (they all have the same shape and trend). If the trend is up go long and if the trend is down go short. Important note 1: If you can't identify a strong major trend or price is channeling sideways - stay out. Important note 2: Make sure there is uniformity in the 50 and 100 MAs. If the 50 is crossing the 100 MA it means a return to support or a potential trend reversal.
- Proceed only if the first two criteria are met, then use a 5 or 10 or 15 M chart to pinpoint the entry point on a pull-back.
- There will normally be a bullish bar at about 7 am for long trades or a bearish bar for shorts. This is your key indicator. You can catch it with a stop order. If you miss it, wait for the pullback. I have learned to call this 7 am bar the 'truth' bar. Whatever else may be happening with any other indicator, this 7 am bar will point in the direction of the coming move. The simple strategy is to follow the direction it points to get into your position.
- After the 7 am bar, there is often a pullback or a pause until about 7:30 (or as late as 7:45) when the move will resume right through to a spike at 8 am.
- You can be cautious by placing a buy stop order above the last bar of the pullback on a 5 M chart, or a sell stop order below the rising pullback for shorts. If you are using a 5 M time frame, the pullbacks can be a bit scary, but consider the action of throwing a ball. You bring your arm back before you throw, and this is a similar action. The stop orders will remove any risk if the pullback turns out to be a reversal, which is unlikely if you do follow the direction of the 7 am 'truth' bar.
- I use a 25 pip target with a 20 pip stop for a scalp trade.
- Never hold onto a position when there is a pending high impact news release or you will get stopped out by a whipsaw.
Example 1. NZD pairs
Example 2. AUD pairs
Tellboy
