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Testing time, Day 2

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    Testing time, Day 2


    Tags -          

    Didnít have time to update yesterdayís post so Iíll continue with this new one. I havenít 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 EMAís 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 Iím 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, hereís 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, hereís 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 Ė just keep in mind which markets are open and you can logically see which pairs should be most active.

    Whatís 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. Itís 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 Ė 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 Iím 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.


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