Sedona- A system for inactive hours
Introduction and reasons:
Boris Schlossberg's book "Technical Analysis of Currency Markets" explains the rationale behind this strategy. The idea is to privilege inactive trading hours.
Taking GBP/JPY as an example, trading volume is highest during the Asian session and London session, and no major fluctuations are expected in the afternoon in New York session. In addition, economic news for these currency pairs is not released when the financial markets of various countries are closed.
The best result was GBP/JPY. The setup is pretty simple: On the 15-minute chart, turn on EMA62 and RSI 9. We can now draw a box indicating the start and end of a currency pair session. This means that if you're dealing with GBP/JPY, the start of the trading session is the start of the Asian trading session and the end of the box is the end of the UK trading session (i.e.: 8pm ET and 12pm ET the following day):
In the trade, we highlight the highs and lows to see if the RSI enters the OB/OS zone at the highs and/or lows. If the RSI visits these areas, we will place a pending order. For example, in the example above, the RSI moves into the OB/OS area and we can then start from a buy position since the price is already at the bottom of the so-called "box". We can enter anywhere 20% lower in the box. In this example, the box is between 238.91 and 236.81 (210 points), so we can buy at any price below 2373.23. Stop loss is 20% below the bottom of the box (236.39) and the first target is EMA62. From there, we have the option to either bank our profits or move our stop loss to the breakeven point and get to the other side of the box.
If we don't see OB/OS in the box, we pass the transaction.
Exit strategy:
All open positions should be closed before the start of the active trading session for that currency pair.
Money management tips:
I use the multiple entry technique. In the case of a buy trade, instead of making a single entry risking 2% of capital, I placed three limit orders at the bottom of the box, at 10% and 20% below, with each order risking 0.5%. In this case, even if I stop my loss, I will lose 1.5%, but if the trade moves against me and then turns my direction, I will be holding two more positions at a better price.
Boris Schlossberg's book "Technical Analysis of Currency Markets" explains the rationale behind this strategy. The idea is to privilege inactive trading hours.
Taking GBP/JPY as an example, trading volume is highest during the Asian session and London session, and no major fluctuations are expected in the afternoon in New York session. In addition, economic news for these currency pairs is not released when the financial markets of various countries are closed.
The best result was GBP/JPY. The setup is pretty simple: On the 15-minute chart, turn on EMA62 and RSI 9. We can now draw a box indicating the start and end of a currency pair session. This means that if you're dealing with GBP/JPY, the start of the trading session is the start of the Asian trading session and the end of the box is the end of the UK trading session (i.e.: 8pm ET and 12pm ET the following day):
In the trade, we highlight the highs and lows to see if the RSI enters the OB/OS zone at the highs and/or lows. If the RSI visits these areas, we will place a pending order. For example, in the example above, the RSI moves into the OB/OS area and we can then start from a buy position since the price is already at the bottom of the so-called "box". We can enter anywhere 20% lower in the box. In this example, the box is between 238.91 and 236.81 (210 points), so we can buy at any price below 2373.23. Stop loss is 20% below the bottom of the box (236.39) and the first target is EMA62. From there, we have the option to either bank our profits or move our stop loss to the breakeven point and get to the other side of the box.
If we don't see OB/OS in the box, we pass the transaction.
Exit strategy:
All open positions should be closed before the start of the active trading session for that currency pair.
Money management tips:
I use the multiple entry technique. In the case of a buy trade, instead of making a single entry risking 2% of capital, I placed three limit orders at the bottom of the box, at 10% and 20% below, with each order risking 0.5%. In this case, even if I stop my loss, I will lose 1.5%, but if the trade moves against me and then turns my direction, I will be holding two more positions at a better price.
📦 Summary of post attachments (6)
Below are all the files (6) shared in the reply.
💡 Featured Recommendations
✍️ Latest by the author
- •
- •
- •
- •
- •
- •
📌 Popular topics
- •
- •
- •
- •
- •
- •
- •
- •
🔗 You May Be Interested In
- •
- •
- •
- •
- •
- •