Anybody tried this system?
The following rules are for short trades,
but the strategy can be reversed to trade
on the long side.
Setup:
- The pair makes a new range low at
least 25 pips (a pip is the forex equivalent
of a tick, or minimum price fluctuation)
below the opening price after the
early Frankfurt/London trading in the
GBP/USD rate begins around 1 a.m. ET. - The pair then reverses and trades 25
pips or more above the opening price. - The pair then reverses once again to
trade back below the intraday low established
in step 1. - Sell a breakout (at least seven pips)
below the London low. - Once filled, place an initial protective
stop no more than 40 pips above the
entry price. - After the market moves lower by
the distance between the entry price and
the stop, cover half the position and trail
a stop on the remainder.
These simple rules position you to
profit from common behavior that can
occur in the pound/dollar when the
London/European market opens.
Rationale is to use London volatility to catch the first major move of the day.Any thoughts on th epotential success of a system like this or what may be needed to refine it?