In this chart I display a trade setup I've been working on. You pick 5 currency pairs, based on relative strength figures, and individual price action traits.
The idea is to profit from the mean reversion phenomena that normally occurs during the low volatility Asian session. Many pairs will show reduced volatility and a tendency to revisit previous areas of accepted value, or pullback from trending activity. I'll use either 3 ATR or structure to define stop loss and take profit levels.
Risk allocation is 1% total capital loss per pair, and that determines the lot size used for each, based on distance to the stop loss.
I use the 1h chart to find setups on pairs that show a strong currency vs a weak one for longs, and the opposite for shorts. I'll expand the comments section with tonight's pairs once the NY session closes.
Today's basket is depicted in the charts above.
Relative strength is telling me NZD and USD are strong, and AUD, CAD, GBP and EUR are weak.
I pick sl levels using different technical analysis methods, but I didn't pick a take profit level.
I'll watch how the Euro session behaved overnight, when I wake up tomorrow. Then either close/cover positions, or move stops to break even.
The beauty of this method is that trades that do well compensate drawdown of the not so good ones.
IvanLabrie
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Covered gbp and eur, I'll look for entries in the following later before Asia opens:
-Short: gbpaud, gbpjpy, cadjpy and euraud
-Long: audusd, audchf, audcad
Today's basket is depicted in the charts above.
Relative strength is telling me NZD and USD are strong, and AUD, CAD, GBP and EUR are weak.
I pick sl levels using different technical analysis methods, but I didn't pick a take profit level.
I'll watch how the Euro session behaved overnight, when I wake up tomorrow. Then either close/cover positions, or move stops to break even.
The beauty of this method is that trades that do well compensate drawdown of the not so good ones.