Strategy to capture pips on the opening of Forex

Strategy to capture pips on the opening of the markets of Forex

Probably the most noticed that the price moves a lot of pips at the opening of the main markets in the Forex (European, American session, etc.). Therefore, any trader take these movements and obtain some pips would like. The only problem is that during the opening of the markets, it is difficult to know in that direction will move the price, since the behavior in the first few minutes is quite chaotic.

For that reason, we present the following trading strategy that can help improve your chances of winning some pips whenever it opens an important market. An important aspect of this system is that it does not use technical indicators, is based solely on the price action.

As we will see below the rules are complex, but require attention and practice.

This strategy is similar to the following which was developed to operate for important news on the market:

Market news based trading system

System configuration

Ø  1 chart of candles with a time frame of 5 minutes or 1 minute.

Ø  Recommended currency pairs: EUR/USD, GBP/USD and GBP/JPY. The system was originally tested with these currency pairs, but can try to apply to another.

Ø  Important market openings: United States, Europe, United Kingdom and Japan.

Ø  Technical indicators: none.

System rules

At the beginning it is not necessary that the trader knows the direction of the market movement. To enter, we're going to enforce orders buy stop and sell stop running only if the price reaches them.

-First place a buy stop order around 5 pips above the maximum and a sell stop order around 5 pips below the minimum of the first candles that form after the opening of the market.

-The amount of candles which we will take into account depends on the time frame in which we are operating. In a 5-minute time frame we use 1-2 candles; in a 1 minute time frame we use 2-5 candles.

-For the stop sign of losses we have 2 possibilities:

Place a stop-loss at a distance of 20 pips of the point where the initial purchase order would be executed.

Place a stop-loss 2-3 pips above maximum (sales order), or under the minimum (purchase order) of the initial candles used to determine the price to open position.

In this case we use the stop-loss that is closest to the input level.

-For the profit taking is recommended to move stop loss 5 pips below (operation of purchase) or above (transaction) current price once the market has moved at least 6 pips in favor of the operation. But we can move the stop loss so close, we can use the shortest possible distance and began to follow the price with the stop loss once the price has moved this distance more 1 pip. But we can move the stop loss at all then you can use a fixed Take Profit of 5-10 pips.

-If there is one or more pending orders without running once after 5 minutes from the close of the initial candles (used to place orders buy stop and sell stop) formed after the opening of the market, it should cancel these orders and wait for the next opportunity.

Considerations

-This strategy probably works in some cases for the news, but if we want it to apply during these events have to be careful if we operate with a broker that it significantly increases the spreads. This significantly increases the chances of losses.

-System I have not tried so far it is not my favorite style of negotiation, why is recommended to evaluate it before with a demo account to see your current performance.

-The system was originally developed to operate in the pairs listed at the beginning. If you want to apply in another pair of currency or type of market trader should be a preliminary investigation before risking your money.

Reference: http://www.tecnicasdetrading.com/2017/02/estrategia-capturar-pips-apertura-mercados-forex.html