According to the latest change in my trading strategy I have replaced forex majors with European currency pairs. The reason for this was that the trading in European currencies is focused in the EU trading hours (i.e. from 8am to 4pm GMT) therefore there is less chance to get stopped out in the AM and US sessions. To backup my decision I did a little research to see if the above statement is valid. The attached table shows how much the given trading session covers relative to the 24 hours ending with that session.
Based on the data presented in this table, only the Sterling (GBP) and the Canadian (CAD) are satisfying for trading in European trading hours. All the European currency pairs show better trading range distributions meaning wide high-low range in the EU trading with relatively narrow range in the AM session.
The EURGBP, GBPCHF and GBPNOK may suit my trading style the best with the EU trading hours covering more than 80% of the previous two session while the AM hours covering less than half of the range of the preceding EU and US sessions.
I will do a similar comparison of the volatility and trendiness of the there sessions.
A downside breakout from the morning’s range has hit my stop at break even. Price has recovered, still looking to re-enter on a second leg of the pullback in aticipation of a breakout above 0.8667.
Enterd long on AUD/USD at Bar#1 on a break above a bullish pin. The pair has recovered from a decent pullback beyond the EMA34. I may have entered a bit late since I missed the inside bar breakout below the EMA because I was away from the desk. The advance has topped just below Monday’s high at 0.8667 which should open the way for another move higher. I moved my stop to break even with target at 0.8470 for a 1:3 risk/reward.
The Aussie moved away from me. I didn’t trade a small signal at Bar X as I was convinced that it would pull lower towards the support line of the current channel.
The preceding bar looked like a false range breakout therefore I was suspicious that the price would come lower to trap sellers shorting a failed breakout above the 0.8550 level.
Entered long after the AUD/USD pair broke above a narrow range inside cluster that formed ahead of the European trading hours. I was playing the long side since the double bottom was confirmed above 0.8277 yesterday. I closed the trade at the 0.8470 level as it was violating the bullish 1h trend channel just below the 0.8477-0.8520 resistance range. I’m looking to re-enter on a retest of the 0.8277-0.8350 support range.
The Aussie may form a double bottom on a daily chart with a 0.8520 target. The 1h timeframe shows higher highs and higher lows but the 0.8275 resistance is still intact. Since the 1d and 4h timeframes still show downtrend I will look to enter short if fails to break above 0.8275 while a decisive break higher will change my bias to the upside.
…and the 60 minute chart:
Entered short at bar 1 after a bearish pin bar, initial stop was hit at the top of the signal bar. The short-term trend was also reversed up ovenight therefore will employ a more conservative entry tactics if another sell signal would form.