The 7am GMT European opening price for Euro pairs and the 14.30 GMT US opening price for USD pairs acts a magnet for price on non trend days. This is due to the phenomenon of volume weighted averaging.
At the European and US opens the large currency orders for the day come in and the traders executing these trades don't buy or sell all in one go as that would risk making the market way to volatile and they would have no control over how their trade fared relative to the average price of the day. Someone ordering billions of EUR or USD would not be impressed with their trader if the price they bought or sold for was below the average price of the day. Therefore traders spend all day buying and selling in packets trying not to be beaten by the average price of the day causing price to always gravitate to 7am. This is far less effective over the summer when businesses and factories close as there are consequently far fewer orders coming through. Trend days often tend to break this rule although even then price will fluctuate around 7am briefly then shoot off. It is quite incredible if you watch price kissing 7am on the nose repeatedly then bouncing off it or going through.
You can profit from this in one of three ways:
You can use 7am for profit targets of a trade you are already in or
You can risk a scalp to 7am ONLY if price has been rejected from a peak or trough on a non trend day and it shows considerable momentum in coming back to 7am. Ie it is spiking up or down. DO NOT enter a trade when price is just in a channel to 7am unless is breaks out of the channel in the direction of 7am. Then scalp from 7 pips away taking profit 2 pips away from the 7am price. So far every call of mine to scalp long or short has worked in fact today 3rd February I took one long and one short calling each one before hand.
If price has been away from 7am and it is approaching it and you are considering a trade AWAY from 7am think again, you could be burnt.
Stop Loss must be set at something obviously technical and no more than 10-12 pips otherwise even an 80:20 win ratio won't make sense any more, and this is easily that successful
Enjoy this one, be sensible with it as I have outlined above.
Trade History:Wins and losers:
3rd Feb: Called twice successfully
4th Feb: Called once successfully
5th Feb: Called one in the main room with entry and exit points and traded two earlier all successful. Note TP has to be 2 pips from 7am as price can miss it sometimes as it did on one of them by 1.8 pips.
6TH February I called a long after the 13.30 news successfully.
Called twice in the main room, successful both times, even on the NFP day.
Called it in the main room successfully
Traded successfully twice according to the rules above ie with strong momentum. Not called out this time.
14th February: Called in the main room. Successful. Called a second with a ten pip profit target but it only made it to 9.5 pips although I did advise closing at 9 pips.
24th February: Called it in the main room. Successful
25th February: Called in the main room successfully. This was an unusual one as there was no spike but price was hovering close to 7am with an obvious counter trade if it failed to get to 7am. This was only for the pros.
Later called in the main room as per standard spike from a higher high back to 7am. Successful
27th February: Called successfully in the main room
4th March: Called successfully in the main room
5th March: Called successfully in the main room
7th March: Called successfully in the main room after NFP release
10th March : Called successfully in the main room.
11th March: Called in the main room on EJ but failed with a news release with loss of 5 pips.
Called in main room on EJ and EU successfully.
12th March: Called one and failed with 10 pip loss. Called a second and won. The first was in a channel and not strictly a spike
13th March: Called in main room successfully on EJ after it spiked down from a double top
Called in main room successfully on EU
EJ called short to 7am with entry and exit points and EJ called long with entry and exit point and a 3rd trade short with entry and exit ALL 3 successful
Called on EJ in main room with entry and exit point successfully.
21st March: EJ traded successfully, EU traded successfully with entry and exit points called.
24th March: EU and EJ called in the main room, unusually hitting after 5pm GMT
25th March: EJ called successfully in the main room spiked up from a channel
. Later two called in main room one on. EU, the other on EJ. Both successful.
26th March: EJ called successfully
27th March EJ and EU called successfully
28th March EU called successfully first long then short
9th April: EJ called successfully and UJ called successfully
11th April EJ called successfully twice morning and 15.45 GMT
15th April EU and EJ called short successfully and EU called long successfully. I also traded EJ long without calling it successfully
22nd April: EU called and EJ called with entry and exit points.
24th April: 4 Traded successfully, only 1 of which was called in the main room
29th April EJ called successfully
2nd May: EJ called successfully . Draw down of 15 pips until target hit
6th May: EJ called successfully. 3 pip draw down before target hit