Profit From Profit-Taking —Scalping th
This is an idea that just occurred to me. I haven't done any testing yet, but I thought I'd post it for some activity.
theory:
Forex is undoubtedly a speculative market. Most trades are short-term; many last less than two days. It can be said that there are many day traders in the Forex market. With this in mind, we can expect that many traders will be looking to close their positions at the end of the trading session if they have not already done so. The evidence is the existence of the "quiet period", which is the period after the end of the North American session (17:00 ET = 22:00 GMT) and before the opening of the Asian session (approximately 19:00 ET = 0:00 GMT). In fact, unless there is some news, the market usually calms down immediately once London exits (12:00 ET = 17:00 GMT). So the idea is to steal some ideas during these days when day traders close their positions and take profits at the end of the trade.
set up:
1. Wait until the end of the London or North American trading session.
2. Check whether the directional deviation (trend) of the day is upward or downward. We assume that the "smart money" had a winning position on the day (which is usually where most of the money is), so they now want to close their position at the end of the trade.
3. At the close of the last bar of the trading day, enter the market in the opposite direction to the main directional deviation of the day.
field of study:
- First we need to see if this theory makes sense. Is it effective?
- Next we need to find the most effective Stop Loss and Take Profit levels.
I will work on this research when I get the chance.
-mathematician
theory:
Forex is undoubtedly a speculative market. Most trades are short-term; many last less than two days. It can be said that there are many day traders in the Forex market. With this in mind, we can expect that many traders will be looking to close their positions at the end of the trading session if they have not already done so. The evidence is the existence of the "quiet period", which is the period after the end of the North American session (17:00 ET = 22:00 GMT) and before the opening of the Asian session (approximately 19:00 ET = 0:00 GMT). In fact, unless there is some news, the market usually calms down immediately once London exits (12:00 ET = 17:00 GMT). So the idea is to steal some ideas during these days when day traders close their positions and take profits at the end of the trade.
set up:
1. Wait until the end of the London or North American trading session.
2. Check whether the directional deviation (trend) of the day is upward or downward. We assume that the "smart money" had a winning position on the day (which is usually where most of the money is), so they now want to close their position at the end of the trade.
3. At the close of the last bar of the trading day, enter the market in the opposite direction to the main directional deviation of the day.
field of study:
- First we need to see if this theory makes sense. Is it effective?
- Next we need to find the most effective Stop Loss and Take Profit levels.
I will work on this research when I get the chance.
-mathematician
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