The daily SW pullback strategy I posted about back in June here has been on my mind. Why? because the 2 week sample test I did showed very promising results.
The reason I did not continue with it is because the numbers need to be pulled at the close of the last candle, which is 5pm EST (NY close). I work during the day, so it’s not feasible to manually enter everything required to find the pair I need to trade. Anyone currently doing this already knows it takes time, you have to go through each JPY pair, fill in the close price and then the 4hr 200MA price just to get the percentage (distance between price and 200MA).
BUT, I have found an indicator that calculates this for me, so all I have to do is enter the percentage into my spreadsheet, which I can do quickly using the live price before 5pm instead of waiting for the candle to close. That way I can place the trade around 5 and not have to worry about missing out on some pips while driving 30 mins home. Since my TP would be 30 pips, every one counts.
Here is a chart of the pair I would have been trading today, CADJPY:
The green arrow shows the last candle of the day, and at the bottom the indicator gives me the distance between price and the 200MA (as a percentage) = 1.41%, which is up 0.58% from yesterday (July 12th).
Here’s the spreadsheet I use to determine the 2 currencies that are the furthest distance apart. Yesterday was July 13th:
CAD was up 0.58% from yesterday and JPY is always 0%, so the difference between the 2 currencies was 0.58%. The higher this number the better chance of a retracement. In this case CADJPY long took top spot, which means I would have gone short at 5pm with a TP of 30 pips and a SL of 40-50 pips (to leave room for widened spread).
Coincidentally, CADJPY also took top spot the day before (Jul. 12), going in the opposite direction.
This trade would have been stopped out because price continued higher before retracing. But for the most part price usually retraces at least 30 pips before continuing higher. I could also look at opening a hedge position instead of using a SL, that would have kept me in this trade.
I am definitely going to keep looking at this strategy to see if I can implement it on a daily basis.