wenlong, below is something i prepared just today for a similar question on my triple threat thread. i don’t know about using just one hour as a basis for entry. here’s how i handle monday trades with ibfx. the broker starts datafeeding only a couple of hours before monday 00:00, their platform time. i usually get two, sometimes only one hour bar before they start the new day. monday is a little dicey to trade anyway, so i require +/- 11 to enter. that extra spread is just to give a little time to settle down. i have also mentioned that there may be some merit to using the open +/- some spread of pips, maybe 12 to 20, but i have not checked that out for sure.
from triple threat thread:
the issue of what to call a “day” has come up before and this is a good opportunity for me try to get a thorough explanation all in one place. a discreet data set called “day” is defined by each broker according to their platform. in hourly bars, you will see the day start and a new bar begin to build at 00:00, platform time. in an hour, we will see 1:00, then 2:00, etc. but, depending on where you live and who your broker is, that 00:00 could be any time for you. i trade with oanda and ibfx. oanda’s platform is on eastern time. since i am in the central time zone, oanda’s day for me is 11pm to 10pm. the ibfx day is on gmt and that is 7pm to 6pm for me. in other words, if i am trading ibfx, their day will conclude as, my time, the 6:00 pm one-hour bar or the 6:59 pm one-minute bar finishes. at 7:00 pm, my time, they will begin their 00:00 (new day) bar and that is when i will be at the charts to enter buy/sell stop orders, assuming i want to trade ibfx and use their definition of day for my orders.
to keep some consistency and point of reference, i use ibfx data and their platform day for all results reporting to this thread. the high of the day is the high between their platform time 00:00 and 23:59, and so on. conveniently, the platform allows me to select “show period separators” which, on a one-hour chart, draws a vertical line at 00:00, the beginning of the day. unless the close yesterday just happens to be very close to the high or low for the day, we should have plenty of time to place our entry stops soon after the 00:00 bar begins.
take note that, unless your broker happens to be on the same time as mine, you will come up with different entries and exits. just like if i use oanda instead of ibfx, i get different numbers. sometimes the different brokers end up pretty close together on a day’s data, sometimes not. i have used a utility program called vitrite which can make a chart transparent. select an oanda daily chart, place the ibfx chart on top and make it transparent, line them up and you visually see the differences. for example, eur/usd, june 29, 2012, oanda’s high for the day was 1.2692, low 1.2252, range 140. same day, ibfx high 1.2691, low 1.2431, range 260. this was a profitable day for the method. trading ibfx, eur/usd +25, +75, +75. trading oanda, +45, +25, +25. you can see that, while both platforms were profitable, the differences may get to be significant. i have not done exhaustive studies to determine just how much difference platform times may make and will recommend that you study some time period for your platform and compare results to what i’ve posted here.
now, could you define “day” as any 24 hour period that happened to be convenient for you to trade and would that be profitable? all i can say is, probably. are you going to miss some significant moves if you aren’t willing to set alerts to wake you up or otherwise be available to your computer during the london session? yes. will we ever have an ea that takes care of all this while we sleep? you’ll have to ask someone with more programming knowledge than me. would i have the nerve to use it if we actually had it? no.
could you also use the ibfx timeframe to place orders on a different platform, i.e., enter orders at 7:00 pm central time no matter what your broker’s time is and come very close to replicating results shown here? yes. back to vitrite and we see that when we match up bars using transparent charts, the broker feeds are within a few pips of one another on virtually every bar. in this case, we would be entering oanda trades on the 20:00 bar, which is the 00:00 bar for ibfx, 7:00 pm central. if you were doing this, you would have to enter all orders one at a time by hand and would not be able to use the very handy order entry ea built for us by rpotor which enters orders based on the prior bar.
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