I think this idea is simple and it seems to work due to the time frames you are choosing to trade. Especially for cable and sometimes eur:usd.
However the Risk to Reward ratio of this strategy seems to be quite high. meaning one unlucky day could wipe the rest of the weeks winnigs.
I have been trading early morning and hove found success by taking the following steps.
1) Set alarm and wake up at 5:50am
2) Study multiple time frames (until the 6am bar starts to form).
3) Use simple indicators
4) Lock in profits by moving the SL
- Trade using 3 time frames.
Using the one day chart with 5 ema and 20 ema indicators give clues as to the direction of the price action especially if the previous days bar has tested the highs (in which case go short) or tested the lows (in which case go long)
Then use the hour chart to establish price entry and SL either ends of the 5 am bar only rather than go back 4 hours. (can also look at general trends too!).
And finally you may use a 5 or 10 minute chart with MACD and EMA 50 & 200 price action to determin direction. Patients is the key as sometimes price action will go against the direction you have established on the one day chart and then half hour later go in the direction you first noted.
This has allowed me to capture around 30-50 pips in 1 - 1.5 hour (trading from 6am to about 7:30am) (i would continue to trade but i have to get dressed and ready to leave for work ;-( .
Another thing i have noticed with cable is from about 6am to 9 or 10 am the price action will go in one direction. and then go in the opposite direction from 11am till 2pm.
let me know your thoughts.
However the Risk to Reward ratio of this strategy seems to be quite high. meaning one unlucky day could wipe the rest of the weeks winnigs.
I have been trading early morning and hove found success by taking the following steps.
1) Set alarm and wake up at 5:50am
2) Study multiple time frames (until the 6am bar starts to form).
3) Use simple indicators
4) Lock in profits by moving the SL
- Trade using 3 time frames.
Using the one day chart with 5 ema and 20 ema indicators give clues as to the direction of the price action especially if the previous days bar has tested the highs (in which case go short) or tested the lows (in which case go long)
Then use the hour chart to establish price entry and SL either ends of the 5 am bar only rather than go back 4 hours. (can also look at general trends too!).
And finally you may use a 5 or 10 minute chart with MACD and EMA 50 & 200 price action to determin direction. Patients is the key as sometimes price action will go against the direction you have established on the one day chart and then half hour later go in the direction you first noted.
This has allowed me to capture around 30-50 pips in 1 - 1.5 hour (trading from 6am to about 7:30am) (i would continue to trade but i have to get dressed and ready to leave for work ;-( .
Another thing i have noticed with cable is from about 6am to 9 or 10 am the price action will go in one direction. and then go in the opposite direction from 11am till 2pm.
let me know your thoughts.
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