Red Lion on the hunt

as you can tell hindsight thinks are pretty clear.

the only mistake i can honestly say i made was the first stop out, after a big drop there is always a correction.

on the last day where no positions were taken, i honestly thought the market was going up as it passed the 1.28 area, had i been paying attention the fact that there would be S&P news on possible down grade of france the whole chart showing positive Euro would have been moot at that point and a possible short close to stop area would have been lucrative.

all in all, although hindsight i can say i could have done better, in real time, we do not have the benefit of that and the chart paints obvious pictures expo facto.

had i decided to trade on the last day after the rumor of france downgrade going back to open i would have taken a trade there eyeing the bullish stop area target, that correlates well with ATR, however letting it run, would be option 1.

as you can see, the plan for next week, usually after these Sovereign rating news and FRANCE, virtually leaves Germany as the only AAA+ credible Nation that will repay for all the mess in the euro.

the pattern of these agencies is that after the Sovereigns they will down grade the banking sector.

Short of US hinting at QE, the euro has a lot more down potential, from the big drop and the consolidation period I am expecting a correction, less than 1.28,

maybe 1.2720-1.2750, I will not take any longs even if they seem attractive. due to the risk they pose,

here some statistical data of hourly volatility for the past year by market hours


Asian OPEN
time 0

atr alr ahr adr
Min. :0.000000 Min. :0.000000 Min. :0.0000000 Min. :0.000000
1st Qu.:0.001100 1st Qu.:0.000300 1st Qu.:0.0003000 1st Qu.:0.000300
Median :0.001500 Median :0.000600 Median :0.0007000 Median :0.000600
Mean :0.001921 Mean :0.001024 Mean :0.0008972 Mean :0.001022
3rd Qu.:0.002350 3rd Qu.:0.001350 3rd Qu.:0.0012000 3rd Qu.:0.001350
Max. :0.008200 Max. :0.008200 Max. :0.0066000 Max. :0.008100

time 1
atr alr ahr adr
Min. :0.000700 Min. :0.000000 Min. :0.000000 Min. :0.000000
1st Qu.:0.001400 1st Qu.:0.000400 1st Qu.:0.000500 1st Qu.:0.000400
Median :0.001900 Median :0.000800 Median :0.000900 Median :0.000800
Mean :0.002133 Mean :0.001026 Mean :0.001107 Mean :0.001025
3rd Qu.:0.002600 3rd Qu.:0.001300 3rd Qu.:0.001500 3rd Qu.:0.001400
Max. :0.006300 Max. :0.004300 Max. :0.005900 Max. :0.004700

time 2
atr alr ahr adr
Min. :0.000400 Min. :0.00000 Min. :0.000000 Min. :0.000000
1st Qu.:0.001800 1st Qu.:0.00040 1st Qu.:0.000500 1st Qu.:0.000500
Median :0.002400 Median :0.00100 Median :0.001000 Median :0.000900
Mean :0.002675 Mean :0.00138 Mean :0.001295 Mean :0.001336
3rd Qu.:0.003200 3rd Qu.:0.00190 3rd Qu.:0.001700 3rd Qu.:0.001800
Max. :0.010500 Max. :0.00980 Max. :0.007600 Max. :0.009600

time 3
atr alr ahr adr
Min. :0.000200 Min. :0.000000 Min. :0.00000 Min. :0.000000
1st Qu.:0.001600 1st Qu.:0.000300 1st Qu.:0.00040 1st Qu.:0.000300
Median :0.002100 Median :0.000800 Median :0.00090 Median :0.000900
Mean :0.002411 Mean :0.001171 Mean :0.00124 Mean :0.001198
3rd Qu.:0.002800 3rd Qu.:0.001700 3rd Qu.:0.00170 3rd Qu.:0.001700
Max. :0.009000 Max. :0.006300 Max. :0.00700 Max. :0.006500

time4
atr alr ahr adr
Min. :0.000300 Min. :0.0000000 Min. :0.0000000 Min. :0.0000000
1st Qu.:0.001200 1st Qu.:0.0003000 1st Qu.:0.0003000 1st Qu.:0.0003000
Median :0.001700 Median :0.0007000 Median :0.0008000 Median :0.0007000
Mean :0.001952 Mean :0.0009818 Mean :0.0009703 Mean :0.0008976
3rd Qu.:0.002400 3rd Qu.:0.0014000 3rd Qu.:0.0013000 3rd Qu.:0.0012000
Max. :0.007200 Max. :0.0061000 Max. :0.0047000 Max. :0.0046000

time 5

atr alr ahr adr
Min. :0.000300 Min. :0.0000000 Min. :0.0000000 Min. :0.0000000
1st Qu.:0.001100 1st Qu.:0.0003000 1st Qu.:0.0003000 1st Qu.:0.0003000
Median :0.001500 Median :0.0006000 Median :0.0006000 Median :0.0006000
Mean :0.001756 Mean :0.0008679 Mean :0.0008876 Mean :0.0008617
3rd Qu.:0.002100 3rd Qu.:0.0013000 3rd Qu.:0.0012000 3rd Qu.:0.0011000
Max. :0.009200 Max. :0.0039000 Max. :0.0091000 Max. :0.0076000

time 6
atr alr ahr adr
Min. :0.000500 Min. :0.0000000 Min. :0.0000000 Min. :0.0000000
1st Qu.:0.001100 1st Qu.:0.0003000 1st Qu.:0.0004000 1st Qu.:0.0003000
Median :0.001500 Median :0.0006000 Median :0.0007000 Median :0.0006000
Mean :0.001728 Mean :0.0008488 Mean :0.0008789 Mean :0.0008043
3rd Qu.:0.002100 3rd Qu.:0.0010000 3rd Qu.:0.0013000 3rd Qu.:0.0011000
Max. :0.008600 Max. :0.0085000 Max. :0.0029000 Max. :0.0067000

time 7

atr alr ahr adr
Min. :0.000600 Min. :0.000000 Min. :0.000000 Min. :0.000000
1st Qu.:0.001500 1st Qu.:0.000300 1st Qu.:0.000400 1st Qu.:0.000400
Median :0.002100 Median :0.000800 Median :0.001000 Median :0.000800
Mean :0.002277 Mean :0.001103 Mean :0.001173 Mean :0.001083
3rd Qu.:0.002800 3rd Qu.:0.001350 3rd Qu.:0.001600 3rd Qu.:0.001400
Max. :0.006200 Max. :0.005700 Max. :0.005200 Max. :0.004500

frankfurt open
time 8

atr alr ahr adr
Min. :0.000900 Min. :0.000000 Min. :0.000000 Min. :0.00000
1st Qu.:0.002400 1st Qu.:0.000725 1st Qu.:0.000700 1st Qu.:0.00050
Median :0.003300 Median :0.001400 Median :0.001400 Median :0.00130
Mean :0.003386 Mean :0.001697 Mean :0.001689 Mean :0.00152
3rd Qu.:0.004200 3rd Qu.:0.002300 3rd Qu.:0.002500 3rd Qu.:0.00230
Max. :0.007200 Max. :0.007200 Max. :0.006100 Max. :0.00600

London open
time 9
Max. :9 Max. :1.488 Max. :1.490 Max. :1.487 Max. :1.488
atr alr ahr adr
Min. :0.000900 Min. :0.00000 Min. :0.000000 Min. :0.000000
1st Qu.:0.003000 1st Qu.:0.00070 1st Qu.:0.000700 1st Qu.:0.000625
Median :0.004000 Median :0.00150 Median :0.001700 Median :0.001650
Mean :0.004225 Mean :0.00213 Mean :0.002095 Mean :0.002168
3rd Qu.:0.005175 3rd Qu.:0.00300 3rd Qu.:0.002875 3rd Qu.:0.003075
Max. :0.010100 Max. :0.00980 Max. :0.009200 Max. :0.009200

time 10

atr alr ahr adr
Min. :0.000800 Min. :0.000000 Min. :0.000000 Min. :0.000000
1st Qu.:0.002500 1st Qu.:0.000500 1st Qu.:0.000800 1st Qu.:0.000600
Median :0.003200 Median :0.001200 Median :0.001700 Median :0.001300
Mean :0.003632 Mean :0.001526 Mean :0.002106 Mean :0.001747
3rd Qu.:0.004200 3rd Qu.:0.002200 3rd Qu.:0.002800 3rd Qu.:0.002400
Max. :0.016900 Max. :0.010400 Max. :0.016500 Max. :0.009200

time 11
atr alr ahr adr
Min. :0.001000 Min. :0.000000 Min. :0.000000 Min. :0.00000
1st Qu.:0.002500 1st Qu.:0.000700 1st Qu.:0.000700 1st Qu.:0.00080
Median :0.003500 Median :0.001500 Median :0.001400 Median :0.00150
Mean :0.003867 Mean :0.001995 Mean :0.001872 Mean :0.00197
3rd Qu.:0.004700 3rd Qu.:0.002775 3rd Qu.:0.002500 3rd Qu.:0.00270
Max. :0.011300 Max. :0.009800 Max. :0.010600 Max. :0.00860

time 12

atr alr ahr adr
Min. :0.000600 Min. :0.000000 Min. :0.000000 Min. :0.000000
1st Qu.:0.002225 1st Qu.:0.000700 1st Qu.:0.000400 1st Qu.:0.000500
Median :0.003000 Median :0.001450 Median :0.001000 Median :0.001200
Mean :0.003314 Mean :0.001818 Mean :0.001497 Mean :0.001601
3rd Qu.:0.004100 3rd Qu.:0.002700 3rd Qu.:0.002100 3rd Qu.:0.002375
Max. :0.008600 Max. :0.008400 Max. :0.007300 Max. :0.007600

time 13
atr alr ahr adr
Min. :0.000800 Min. :0.000000 Min. :0.000000 Min. :0.0000
1st Qu.:0.002225 1st Qu.:0.000700 1st Qu.:0.000500 1st Qu.:0.0005
Median :0.002900 Median :0.001500 Median :0.001200 Median :0.0012
Mean :0.003210 Mean :0.001726 Mean :0.001484 Mean :0.0015
3rd Qu.:0.003700 3rd Qu.:0.002400 3rd Qu.:0.002100 3rd Qu.:0.0021
Max. :0.011100 Max. :0.008600 Max. :0.007300 Max. :0.0071

new york open
time 14
atr alr ahr adr
Min. :0.000500 Min. :0.000000 Min. :0.00000 Min. :0.000000
1st Qu.:0.002900 1st Qu.:0.000900 1st Qu.:0.00060 1st Qu.:0.000800
Median :0.004000 Median :0.001900 Median :0.00160 Median :0.001550
Mean :0.004537 Mean :0.002457 Mean :0.00208 Mean :0.002276
3rd Qu.:0.005300 3rd Qu.:0.003375 3rd Qu.:0.00260 3rd Qu.:0.003175
Max. :0.020200 Max. :0.016100 Max. :0.02020 Max. :0.020200

time 15
atr alr ahr adr
Min. :0.000700 Min. :0.000000 Min. :0.000000 Min. :0.000000
1st Qu.:0.003000 1st Qu.:0.000725 1st Qu.:0.000800 1st Qu.:0.000825
Median :0.004100 Median :0.001750 Median :0.001800 Median :0.002000
Mean :0.004673 Mean :0.002306 Mean :0.002368 Mean :0.002423
3rd Qu.:0.005875 3rd Qu.:0.003175 3rd Qu.:0.003175 3rd Qu.:0.003300
Max. :0.016400 Max. :0.010400 Max. :0.015700 Max. :0.010700

time 16
atr alr ahr adr
Min. :0.000800 Min. :0.000000 Min. :0.000000 Min. :0.000000
1st Qu.:0.003225 1st Qu.:0.001000 1st Qu.:0.000800 1st Qu.:0.000600
Median :0.004200 Median :0.001900 Median :0.001700 Median :0.001550
Mean :0.004722 Mean :0.002627 Mean :0.002095 Mean :0.002371
3rd Qu.:0.005600 3rd Qu.:0.003575 3rd Qu.:0.002875 3rd Qu.:0.003375
Max. :0.012900 Max. :0.012500 Max. :0.012700 Max. :0.012500

time 17
atr alr ahr adr
Min. :0.000700 Min. :0.000000 Min. :0.000000 Min. :0.000000
1st Qu.:0.002800 1st Qu.:0.000500 1st Qu.:0.000700 1st Qu.:0.000600
Median :0.003600 Median :0.001300 Median :0.001700 Median :0.001600
Mean :0.003857 Mean :0.001801 Mean :0.002056 Mean :0.001893
3rd Qu.:0.004700 3rd Qu.:0.002500 3rd Qu.:0.003100 3rd Qu.:0.002600
Max. :0.012500 Max. :0.009200 Max. :0.010800 Max. :0.009600

time 18
atr alr ahr adr
Min. :0.000400 Min. :0.000000 Min. :0.000000 Min. :0.000000
1st Qu.:0.001900 1st Qu.:0.000500 1st Qu.:0.000600 1st Qu.:0.000600
Median :0.002600 Median :0.001150 Median :0.001200 Median :0.001100
Mean :0.003143 Mean :0.001509 Mean :0.001635 Mean :0.001523
3rd Qu.:0.003700 3rd Qu.:0.002000 3rd Qu.:0.002000 3rd Qu.:0.001900
Max. :0.013600 Max. :0.013100 Max. :0.012900 Max. :0.012500

time 19
atr alr ahr adr
Min. :0.000600 Min. :0.000000 Min. :0.000000 Min. :0.000000
1st Qu.:0.001700 1st Qu.:0.000500 1st Qu.:0.000400 1st Qu.:0.000500
Median :0.002300 Median :0.001000 Median :0.000900 Median :0.001000
Mean :0.002749 Mean :0.001341 Mean :0.001408 Mean :0.001393
3rd Qu.:0.003500 3rd Qu.:0.001850 3rd Qu.:0.001900 3rd Qu.:0.001900
Max. :0.008200 Max. :0.006700 Max. :0.007600 Max. :0.006100

time 20

atr alr ahr adr
Min. :0.000400 Min. :0.00000 Min. :0.000000 Min. :0.000000
1st Qu.:0.001600 1st Qu.:0.00050 1st Qu.:0.000400 1st Qu.:0.000300
Median :0.002300 Median :0.00110 Median :0.000900 Median :0.000800
Mean :0.002799 Mean :0.00155 Mean :0.001249 Mean :0.001221
3rd Qu.:0.003450 3rd Qu.:0.00205 3rd Qu.:0.001700 3rd Qu.:0.001700
Max. :0.015100 Max. :0.01290 Max. :0.009700 Max. :0.009700

time 21
atr alr ahr adr
Min. :0.000600 Min. :0.000000 Min. :0.000000 Min. :0.000000
1st Qu.:0.001400 1st Qu.:0.000300 1st Qu.:0.000500 1st Qu.:0.000400
Median :0.001900 Median :0.000700 Median :0.000900 Median :0.000800
Mean :0.002473 Mean :0.001114 Mean :0.001359 Mean :0.001273
3rd Qu.:0.002800 3rd Qu.:0.001500 3rd Qu.:0.001700 3rd Qu.:0.001500
Max. :0.014300 Max. :0.008900 Max. :0.013100 Max. :0.012700

time 22
atr alr ahr adr
Min. :0.000000 Min. :0.0000000 Min. :0.0000000 Min. :0.0000000
1st Qu.:0.000800 1st Qu.:0.0002000 1st Qu.:0.0002000 1st Qu.:0.0002000
Median :0.001200 Median :0.80005000 Median :0.0005000 Median :0.0004000
Mean :0.001342 Mean :0.0006957 Mean :0.0006464 Mean :0.0006507
3rd Qu.:0.001700 3rd Qu.:0.0009000 3rd Qu.:0.0009000 3rd Qu.:0.0008000
Max. :0.006400 Max. :0.0045000 Max. :0.0056000 Max. :0.0045000

time 23
atr alr ahr adr
Min. :0.000100 Min. :0.0000000 Min. :0.0000000 Min. :0.0000000
1st Qu.:0.000900 1st Qu.:0.0003000 1st Qu.:0.0003000 1st Qu.:0.0002000
Median :0.001200 Median :0.0006000 Median :0.0005000 Median :0.0004000
Mean :0.001426 Mean :0.0007871 Mean :0.0006386 Mean :0.0006205
3rd Qu.:0.001750 3rd Qu.:0.0010500 3rd Qu.:0.0008000 3rd Qu.:0.0008000
Max. :0.005400 Max. :0.0034000 Max. :0.0054000 Max. :0.0045000

the numbers might not make sense to you but here is the interpretation.

from 00:00 GMT to 0800 GMT the activity is centered around Tokyo and the Asian range for average hourly candles is about 20 atr from high-low (this is an average)

Asian volatility is Low,
Europe and Europe/America the volatility and range of the hourly candles is high
then when Europe closes the volatility decreases

common sense to many traders..........not so much for newbies

I am trying to find a way to measure the usual net range of the sessions, but i am still breaking my head over it.

i cannot provide mathematical statistical data as of now, but behavior i have noticed is that Asia trades inversely to ultimate market close

in Asian session usually as far as i have observed (again with no statistics performed just ball park eyeballing)

will trade below open when it closes above open
and when Asia moves decisively usually it is a pump and dump.

i would like to hear comments on the matter.

open/closes usually cluster (again apriori ball park observations)

Do some statistical analysis of the hourly bars from 00:00 to 10:00 and you should have it (ie price at open - close at 10:00) should do it. Or use one of the non standard bars (ie 8 hour bars). Forgive me if you have already tried this.

However Asia is usually an 60-80 pip range. I know this because one of my little games I play at London open is to measure the range and then say "so now it has to break either north or south for 50-70 pips to form an average day with a range of 130 pips." Then I block out potential targets.

Another indicative pattern is the two hours before London open. What I have found is the move before london open is a minor variation of what can happen during the london market. However, no real stats on this and I would be interested if you came up with some.

While you are at it you might want to look at hourly based reversal times. Not exactly sure how you would define a reversal but back when I thought I could make money trading off of statistics I manually reviewed charts looking for the times the market was most likely to stage a reversal. For example I found that Cable was more likely to stage a reversal at London open while the euro was likely to stage a reversal an hour later.

Yet another interesting pattern was the partial daily bar. Most daily bars have a shadow on top and on bottom. If open formed either the highest or the lowest price of the day then the odds favored a price reversal, with price breaking through open to form a shadow either above or below open.

http://www.stocktime.ru/en/strategy.html

that is actually what i was trying to do, so it's pretty helpful. gives realistic expectations and baseline.

congrats red to his results!

keep it up

I have concluded upon studies of strategy one, not to be optimal......I do not wish to continue that strategy, however it can be profitable if one uses flexibility. The continued theme is one needs flexibility in trading.

However, it is important to realize the most likely scenario of daily close FIRST AND FOREMOST then one can intraday trade.

Today i took two trades in a more flexible matter.

on the premise that JPY crosses are more active on ASIA, as well as AUD is traded more heavily during ASIA.





eur/jpy usd/jpy

eur up means jpy down
usd up means jpy down
eur/usd
eur up means usd down
usd/jpy chart should look down unless jpy weakness

so usd/jpy stalling at support
while eur/jpy stalling upwards signals imminent correction to the pair....not having time due to being busy i took my profits

do you intend to catch the daily close with this method red?

took short trade on eur/usd,

not that it matters but ROI so far 4.62% this is subject to change, however where this does matter is the fact that it gives me buffer money for risk taking.

all core economic news for the EZ was positive in Asian session

Spain and France tested the relevance of the S&P downgrade this was a very important test, as the bonds were bought at lower yield, the postulation is that a credit downgrade means more expensive borrowing cost hence the Euro went up so much, as well as the market being heavily short.

so at this point no bad news = good news.
The psychology factors here is that when a market is too bias on one side every one begins to believe that it must correct so NET SHORT positions diminish does not necessarily mean that LONG positions are being taken.....
this creates a liquidity vacuum in which shorts are diminished, so any long position carries more strength as the market attempts to match the orders...which triggers short coverings and SL

Greece right now is in focus as the debt talks have broken down and this might be prompting the sharp correction that we saw, however .............it is hard to tell whether the euro will continue on it's impulse down, as we have seen 1.2660 hold well which means that overall the eur daily chart shows diminishing selling= loss of momentum and possible significant upward correction.

perhaps FOMC at the end of the month might give the market the long hoped for bad USD data to bring the euro up

LONGS at this moment seem pretty dangerous but so do shorts, which leads me to believe more flexibility is required

well the problem with catching the close is that

we are assuming that the market is predictable and the close is predetermined
the daily close strategy brings an edge in probability and the trade off is that it allows for a better GUESS, while keeping risk low, and screen time low

IT IS VERY IMPORTANT TO UNDERSTAND HOWEVER THE MOST LIKELY CLOSE as far as direction, in order to trade intraday better, as we would know what the likely trend is.

so THE METHOD IS SOLID IN THAT MATTER but to eliminate guess i think flexibility is important

THE MONEY MANAGEMENT HOWEVER IS DEAD ON, as far as giving me INCREDIBLY PRE PLANNED THOUGHT OUT RISK TO ACCOUNT

Moved stop loss to 1.2735 why? protect small profits (NEVER MOVE SL to increase risk, always move to PROTECT PROFIT OR DECREASE RISK)
hourly open at 1.27358 anything below that whether this hour or next signals diminished bullish pressure, we are seeing an inverted hammer that should stop correcting by now and should move above 12753 to maintain direction

3 likely scenarios and i am only interested in one.

id like to see a drop to...

and yes this is good methodology or maneuver i also use and will use more often

"(NEVER MOVE SL to increase risk, always move to PROTECT PROFIT OR DECREASE RISK)"

remember this one peeps.

i realize equities actually closed positive however the EUR is not getting a lot of buying so ............ so i wait till Europe gives directions.

as it stands seems like closing below open is likely today

b/e is susceptible but risk is 0% with no clear confirmation of downside bias is best to keep risk low

stopped out, with very small profit, however 1.28 is holding well, we are in the last stages of Europe session

IMF seems to be pledging 500 billion, and equities, bond yields positive S&P at resistance and might just move above it.

as the VIX is at support, picking tops is known to be dangerous so patience is key here