Didn’t have time
to update yesterday’s post so I’ll continue with this new one. I haven’t placed
any trades yet but I have worked out 4 different chart templates with
indicators on them to see if any of them work or could work after some changes.
Template 1
This chart
template uses 50-period and 14-period EMA’s for trends. Due to my observations
yesterday I will use Aroon to set my entry points. I am not sure about stop
loss and exit yet, but I hope to get them in place soon as well. I have also
added OBV to this chart to see if in anything special happens with volume
during signals by Aroon.
Template 2
This chart
template uses 50, 9 and 5 day simple moving averages. It also uses Bollinger
bands and 14-period RSI. All of these indicators should help making better
decisions.
Template 3
Here I’m using
50-period moving average, Parabolic SAR and Williams %R.
Template 4
This template
uses Bollinger bands, Starc bands (see description below), CMO (Chande Momentum
Oscillator) and also RSI. And also stochastic oscillator. Just for testing.
Before going on,
here’s the description of what Starc
Bands are. It is an indicator that
is created by plotting two bands around short term moving average of an underlying
asset's price. Upper band is created by adding a value of ATR (Average True
Range) to moving averages. The lower band is created by taking the value of ATR
off the short term moving average. When price moves towards the upper band it
gives a signal that the price may pull back. Vice versa in case of lower band.
Starc bands will tighten in steady markets and loosen in volatile
markets. STARC Bands define upper and lower limits for normal price action..
As a next thing I
will be testing all those templats to see if any of them (or maybe altogether)
is usable. But before that we need to get introduced to trading days and hours,
most active trading hours (depending on time and currency).
Firstly though,
here’s a chart with trading sessions (GMT):
|
Region
|
Market
|
Open
|
Close
|
|
Europe
|
London
|
8:00 am
|
5:00 pm
|
|
Frankfurt
|
7:00 am
|
4:00 pm
|
|
America
|
New York
|
1:00 pm
|
10:00 pm
|
|
Chicago
|
2:00 pm
|
11:00 pm
|
|
Asia
|
Tokyo
|
00:00
|
9:00 am
|
|
Hong
Kong
|
1:00 am
|
10:00 am
|
|
Pacific
|
Sydney
|
10:00 pm
|
7:00 am
|
|
Wellington
|
10:00 pm
|
6:00 am
|
During London
& New York session more active currency pairs are EUR/USD, GBP/USD
and USD/CHF. During Tokyo/Sydney sessions most active pairs are EUR/JPY, AUD/USD,
USD/JPY, AUD/JPY and during Sydney
session AUD/USD, EUR/USD. Nothing too difficult as you can see – just keep in
mind which markets are open and you can logically see which pairs should be
most active.
What’s the easiest way to keep track of all the different
times in different time zones? For myself I have found a website that offers
this feature. Check the
forex
hours clocks here. It’s a basic page I made for myself there that included
just the four main times. Feel free to use it.
So it looks that my main times for making trades
should be
- 1 pm – 4pm GMT (for EUR/USD, GBP/USD, USD/CHF)
- Midnight-7 am GMT (for EUR/JPY, AUD/USD, USD/JPY, AUD/JPY,
EUR/USD)
There are
different currency pairs that often move in the same direction. For example,
paris that often (not always ) move in the same direction:
· EUR/USD and GBP/USD
· EUR/USD and NZD/USD
· USD/CHF and USD/JPY
· AUD/USD and GBP/USD
· AUD/USD and EUR/USD
And pairs that are often moving in a opposite direction:
· EUR/USD and USD/CHF
· BP/USD and USD/JPY
· GBP/USD and USD/CHF
· AUD/USD and USD/CAD
· AUD/USD and USD/JPY
Today I’m going
to test my chart templates and try to use them to see if any of them are of any
hope. Will update later or add a new post.
