The strategies presented here are based on approximately the same phenomenon, which, it seems to me, will not die as long as markets and risk management exist. Therefore, their main advantage is vitality. Understanding the essence of the phenomenon mentioned above, you will be able to create your own strategies later on by the same principle, without fear that they will “stop working.” Keep in mind also that I give general principles + entry rules. To make a profit, any strategy will still have to be adapted for a particular trader and tested, tested, tested…
So, the differences in strategies lie in the details of opening and closing deals. These strategies have no names, and most importantly their property is “multi-timeframe”. What does it mean? This means that we will trade situations at those points that are visible on a large number of timeframes. Why so – look further.
Now about the basics of the approach.
Surely many of those who have studied Forex for at least six months have come across a trading strategy called the London Explosion. The bottom line is simple, like two pennies – we look out for the corridor formed by the Asian and Pacific sessions, put up a purchase from above, a sale from below and forward – we are waiting for Europe and, as a result, great volatility.
On “Europe” due to a sharp increase in trading activity, a breakdown of any of the corridor boundaries may occur, to which the trader expects to join:
By the way, the vertical dashed line on the left is a “period separator” indicating the beginning of the day. It makes sense to set the delimiters for convenience. How to do this, look on the Internet.
So there you go!
The basis of all strategies is in trade after the Pacific and Asian sessions. However, in both cases, we are not looking at some kind of corridor. No, no … We look at the maximum and minimum value of the price formed during these sessions.
The basis of all strategies is in trade after the Pacific and Asian sessions. We are interested in the maximum and minimum value of the price formed during these sessions.
Why is it cooler?
Because, firstly, it’s simpler – you don’t have to ask questions about which corridor to take, and why this particular one, etc. Because with corridors, as with trends, everything is always very complicated and twofold – for the sake of experiment, you can throw any price corridor onto any trading forum yourself, and they will designate it to you in hundreds of different ways.
Next, secondly. We find places where it is most likely that:
- Delayed buy-stops and sell-stops.
Both of these types of orders are executed “independently”, i.e. automatically, without the direct participation of the trader, which gives a certain hint (do not confuse with a guarantee) on the predictability of situations that are possible in the places of their presentation. What do these types of orders do? They seem to “accelerate” the price in the direction where they are set. Up to accelerate buy-stops, as well as stop-loss sellers. Down – sell stops and stop the loss of buyers.
So, thirdly, our minimum and maximum price per day (starting from 00:00 to 09:00) are visible (drum roll!) On ALL time frames, starting from M1 and ending with D1 (in the case of D1 this will be the top and bottom of the emerging today’s candle).
In the figure, I give a comparison of M5 and H1, because I didn’t take a screenshot in the current mode and the daily candle has already been formed, and on the Н4 the period separator is not visible. But you can experiment yourself – the date of the “event” is visible at the bottom of the screenshot, the values of the levels are also marked.
Thus, continuing the logical chain, the more traders see these prices, the more there can be all sorts of orders that accelerate the price – stop loss and buy/sell stops. And this means the more likely and larger will be the expected “event” in these places of the schedule.
I clarify one nuance: the attentive reader probably wondered, “Why does the author give explanations of what is happening on the chart, if he himself hinted at the futility and meaninglessness of any explanations?” Absolutely. There is no guarantee whatsoever on the chart, on the market, or in trading at all. There is no evidence that at some levels there are many more orders than at others. But we do not need them. I give explanations solely because we all like them. And when there is an explanation – it is much more comfortable to follow the recommendations.
In fact, we just need to understand the big picture. For example, there is a darker cloud, and there is a brighter one – we expect rain to come from a darker cloud rather than a lighter one. Here is the same here. It just seems to everyone that trading is more mystical than the weather. In general, in terms of levels, we make an abstract comparison in the spirit of “what is more, what is less.” If there is some abstract price level that can be seen on more TFs, then, as a result, more people see it, and, as a second consequence, something more interesting is possible there than at local levels. No one hundred percent guarantee, only logic, and common sense.
So, in summary: at approximately 08:45 we just find 2 points on the chart – the minimum price per day and the maximum price per day. That’s all you need to know for now.
Now we turn to a detailed analysis of trading strategies.