Basket Trading the European Open

Friday 15 September at 6:30 (UK time) NZD/JPY was top of the pairs strength chart, and still is as I post this report with a profit of 90 pips (see the charts below). So for traders who want a longer intra-day trade with a higher target this was the pair to trade.

For short-term scalpers like me there were two opportunities for basket trading with scalp targets of 25 pips. JPY pairs and NZD pairs, with JPY pairs giving the best results.

No day to trade today, unless you know what you are doing. I am skeptical.Thanks and
Regards

If we follow the rules there should be a basket trade on at least one major currency every day, sometimes two currencies. It is good to be cautious and conservative until the system has proved its worth and we have the confidence to trust it.

See today's results below.

Monday 18th September. At 06:30 (GMT+1) the strongest pair on the currency pairs table was AUD/JPY, with all JPY pairs grouped together to show a very weak JPY against all other currencies. So I chose to go with a weak JPY, but I made a simple, yet fundamental mistake. We need to make a distinction between Eastern currencies such as JPY, AUD and NZD against the Western currencies of EUR, CHF, GBP, USD and CAD. At this time of day the Eastern markets are closed and the Western markets are opening. If we compare the price action of NZD/JPY with CAD/JPY we will see that price action has momentum with the CAD and not with NZD.

My fundamental mistake was to open trades with NZD/JPY and AUD/JPY instead of CAD/JPY and GBP/JPY. The NZD and AUD trades produced nothing whereas we can clearly see the results of the alternative of CAD and GBP.

This basket trading system works if we follow the rules set out in the first post, but we must also be aware of selecting those pairs with the most potential at this time of day. Best to all.

Today is also lackluster. With much pause 45 min late opened eurjpy, small lot size because of no clear sig. My other choice was nzdjpy. same thing. slow day. good to take no chances and improve. Thanks and
Regards

It was a pity today that currencies paired with the very weak JPY reached a sharp peak at 6 am GMT+1. This led to inevitable retracements on all pairs which is something to bear in mind for the future.

Although it is wise to stay out of the market when high-impact news items are released, there are opportunities for trading on the impact of some such releases.

This morning at 7 am GMT+1 a news item was released by the US FOMC economic projections. This release had a significant impact on the AUD and the NZD. See the charts below for an idea of how this item impacted those currency pairs.

Trading the news requires special knowledge and techniques that may better be learned elsewhere, however, we can learn to use these news spikes to our advantage when they impact a 'basket' of pairs, which is what this thread is all about. The two sets of charts below for NZD and AUD were snapped when they occurred at just after 7 am. Then we'll take a look at how we can capitalise on such a spike after it has happened.

As a continuation of the previous post, here is the outcome of those news spikes on AUD and NZD pairs at 7 am this morning. Notice how every single one, without exception, retraced before continuation of the spike direction.

With the AUD pairs, notice how price retraced back to the resistance level that it broke though on the way up with AUD/EUR and AUD/USD. However, with GBP and CHF the retracement was much lower, with AUD/GBP going right back to the daily pivot and CHF dropping to the 20 ma.

The NZD pairs showed virtually the same story. See these two chart collections below. The point is this: when there is uniformity in a news spike, wait until it stalls and then catch the retracement. Where you set your target may depend on the pairs you choose, but even if you set only a 10 pip target on each pair you will be quids in. Next time you see a morning spike like this on a basket of pairs give it a test on your paper trading and see what you can make. Happy basket trading the high impact news.

My selection Nzdusd and audchf buy. held on, should have exited in 1 hour. still 173 pips. o.k Thanks and
Regards

My selection euraud, gbpaud. 253 pips o.k, wonder what tellboy selected. Thanks and
Regards

Fixed flaws and bugs. Same mistakes should not happen again. Looking forward to improvements and results. Thanks and
Regards

Improvement helps, as usual. Check out my explorer. My selection Gbpchf. Thanks and
Regards

My selection Gbpchf. Check out my explorer. Thanks and
Regards

This pair seems to be your favourite. I am still using the strategy of trading four synchronised pairs. This morning I made 65 pips on EUR/USD EUR/JPY EUR/AUD and EUR/NZD .

Great! Is this the only strategy you use per day? And based on how long you've been trading this strat, have you ever closed a month with a negativ performance ?

No, I use the 7 am London time 15m strategy as described in the post 1. It is a coincident that gbpchf came twice in a row. I use the strength meter and select only one currency. I think the 2nd currency takes a u-turn most of the time. For example today by my standards eurjpy sell was the only currency of the eur pairs at 7 am London. And yes I have had a -ve month, but I don't think it will happen again, or I hope so, with the new techniques that I have learned. Thanks and
Regards

Naturally I have had negative end of month in the past, but as I have applied the rules my success rate is becoming constant. This is the only strategy I use as I have other things to do in the day. If I haven't made a trade by 7:30 then I'm out for the day.

That is exactly what I do. Today I entered my main trade gbpchf buy at 7:06am London. But I did not exit at 10am as the trend was strong. Thanks and
Regards

Another day another 1000 pips. Check out my explorer. Gbp is not setteling yet. Thanks and
Regards

Can you post some screens to illustrate your trading examples ?