The most important factor in the market is VOLATILITY.
No matter how effective your method is, if you ignore market volatility you won’t make it. Trend trading strategies will work at time of high volatility and range trading will be effective during low volatility time.
Try to trend trade the EURUSD during Asian session for example you will lose your money. Try to range trade during UK open and you will also lose your money.
You must know what your system is about: a range trading method or a trend trading approach.
So my methods:
1-Trend trading during time of expected great volatility: UK,US,FRANCFURT SESSION OPENS and after high impact news release
2-Range trading during late US to Tokyo open. (I’ve got the best performance here).
Below is the screen of my last range trading during the late US session(low volatility). Tue 15 DEC 15.
I identify recent and significant swing high/low, then take a counter momentum trade when price trades back there. Simply! But the most important thing is volatility is going down(ATR). I also limit my trading to 2 hours.
Range trading the late US session 23 DEC 15.
Second drawdown day for december: 2 OTM and 1 ITM. I wasn’t fully focused and take a call EURUSD instead of the cable that was ITM. So technically it’s 2 ITM and 1 OTM but on my balance it’s a drawdown.
Edit: here is the video review https://www.youtube.com/watch?v=vPZyvYhke08 . It’s my best session of december. I was worrying about the last 2 weeks of this month but I’am doing pretty well for the moment.
I inadvertently took a put on the cable that finished OTM. But technically it’s 2 ITM EURO and USDCAD good day . The EURO and the GBP was stalling near their resistance, I avoided to take them.
The EURO moved quite stongly and broke a higher TF resistance it results to a loss. I managed to not take another OTM Yen.
It’s a poor range trading week overall: only 3positions since monday.
Range trading is green today +166usd 2ITM. I reviewed the last 5sessions and found that the volatility at 18:30 GMT (time I used to start) is still high for the EURO and YEN. So I decided to start later today at 19:00GMT. Price was calmer.
News give opportunity!
What’s a trending day. I missed the UK session then when I opened my chart I see that the EURO exploded more than 70pip!! But the UK/EUR news give new opportunities to trend trade.
There is a general increase in market volatility. Market tends to have some directional strenght in the late US session. The best time for range trading is the complete US close (Nyse close).
