There are a lot of intraday strategies on the Forex market, but short-term trading itself is quite difficult. The point is that a trader has to deal with the so-called market noise, and sometimes with high volatility. In just a few minutes, the price can cover a distance of tens of points and come back.
Accordingly, a strategy is needed that would determine the likelihood of such movements and provide an opportunity to get the best entry points. These systems include the intraday strategy "Opening up and down". However, it should be noted that it requires the trader's increased attention.
Hourly and minute time frames are used as timeframes for this strategy. You can choose any currency pairs, but preferably those with small spreads.
Before you start working on this strategy, you need to decide on a currency pair. Suppose you are planning to trade the GBP / USD pair. Then the hourly timeframe is set. Use the CTRL + Y keyboard shortcut to set period separators. This is necessary in order for the trader to see the beginning and end of the current and previous periods.
After setting the parameters, it is necessary to mark on the chart the maximum and minimum values for two days (previous and current). Then you should determine the maximum and minimum opening prices of the candles. It is important not to confuse these values with daily highs and lows.
It is worth noting that the opening points of the candles will change during the day, but this does not affect the work of the system in any way.
After drawing the markup on the chart, you can proceed directly to work on this system. Let's define the rules for opening buy and sell deals. According to this strategy, you can open buy deals at the moment when the price drops below the minimum closing price of the candlestick, and then turns out to be above this mark again.
It is recommended to open sell trades if the price turns out to be above the maximum candlestick opening level during the day, and then falls below this level. Deals are opened with pending orders. To buy, you need to place a Buy Stop order at the minimum open price for the day. For selling - accordingly, Sell Stop order at the highest open price for the day.
In principle, the rules of this strategy allow not placing pending orders, so some traders open positions manually. It all depends on how much accuracy is needed.
On the other hand, it is very important to determine whether there was indeed a breakout of the range of the minimum and maximum opening prices. Sometimes it happens that the price only goes one pip below or above these marks, which should not be considered as a signal. In order to avoid such situations, you can use lower-order timeframes, for example, five-minute ones.
Moreover, switching between timeframes is done in the same chart window so that the markup is preserved. A sell trade should be considered when the previous candlestick closes above the maximum open price of the day, and the current candlestick touches this level again, only from top to bottom.
If we are talking about a pending Sell Stop order, it should be placed below the maximum open price of the day.
With regard to the purchase, everything happens exactly the opposite. The price must go beyond the minimum opening level of the day. After that, it should return to the range, where there is an opportunity to open a buy deal.
Capital and risk management, some aspects of working with a strategy
The author of this technique advises to open positions starting from 16.00 Moscow time. However, this is just the author's recommendation. Traders can trade using this method at any time, taking into account the time zones in which they are located.
To minimize risks, it is recommended to place stop orders. For sell trades, you need to place a protective order just above the maximum price for the day (not to be confused with the maximum open price for the day). For buy trades, the stop order must be set just below the daily minimum price (not to be confused with the daily opening minimum price).
As for profit targets, there are several ways to close a trade. First of all, as soon as the price is in the profitable zone (from 5 points), the stop order can be moved to the breakeven level. As for directly closing positions, you can do this after reaching a profit, for example, in ten points. In addition, profit-taking can be done near the opposite line. Some traders use a trailing stop when working with this system.
At the beginning of the description of this strategy, at the preparation stage, the levels of the maximum and minimum prices for the day were marked. What is it for? If the price breaks through one of these marks, the likelihood of a transition to the trend increases significantly. Accordingly, growth or decline may continue, making it impossible to work with this system.
Traders who work with this strategy can take advantage of multiple entries within one hour. If the price goes beyond the maximum opening price several times and returns to the range, this opportunity is worth using.
Given the fact that the work is carried out at short distances, the profit for the strategy is usually insignificant. Accordingly, it is best to use currency pairs with low spreads. For competent capital management, it is not recommended that the amount of risk exceeds 1% of the deposit. Moreover, there can be quite a lot of entries to the market during the day.
Now let's look at an example of working with this system. The screenshot above shows the hourly chart of the GBP / USD currency pair. The price is close to the maximum opening mark of the day. Accordingly, you can switch to one-minute timeframes for a more accurate determination of the entry.
On the five-minute chart, you can see that the price stays above the maximum opening level of the day for some time, and then declines below this mark. This is the right time to open a sell position.
A stop order in such a situation is placed just above the maximum price for the day. As soon as the price moves in the direction of the forecast 5 points or a little more, you can move the stop order to the breakeven level or place a trailing stop order.
When working with this strategy, it is very important to ensure that a new minimum or maximum opening level does not appear on the hourly chart. If this happens, it is necessary to apply the counting anew, taking into account the new extremum of the open price.
Accordingly, a strategy is needed that would determine the likelihood of such movements and provide an opportunity to get the best entry points. These systems include the intraday strategy "Opening up and down". However, it should be noted that it requires the trader's increased attention.
Hourly and minute time frames are used as timeframes for this strategy. You can choose any currency pairs, but preferably those with small spreads.
Before you start working on this strategy, you need to decide on a currency pair. Suppose you are planning to trade the GBP / USD pair. Then the hourly timeframe is set. Use the CTRL + Y keyboard shortcut to set period separators. This is necessary in order for the trader to see the beginning and end of the current and previous periods.
After setting the parameters, it is necessary to mark on the chart the maximum and minimum values for two days (previous and current). Then you should determine the maximum and minimum opening prices of the candles. It is important not to confuse these values with daily highs and lows.
It is worth noting that the opening points of the candles will change during the day, but this does not affect the work of the system in any way.
After drawing the markup on the chart, you can proceed directly to work on this system. Let's define the rules for opening buy and sell deals. According to this strategy, you can open buy deals at the moment when the price drops below the minimum closing price of the candlestick, and then turns out to be above this mark again.
It is recommended to open sell trades if the price turns out to be above the maximum candlestick opening level during the day, and then falls below this level. Deals are opened with pending orders. To buy, you need to place a Buy Stop order at the minimum open price for the day. For selling - accordingly, Sell Stop order at the highest open price for the day.
In principle, the rules of this strategy allow not placing pending orders, so some traders open positions manually. It all depends on how much accuracy is needed.
On the other hand, it is very important to determine whether there was indeed a breakout of the range of the minimum and maximum opening prices. Sometimes it happens that the price only goes one pip below or above these marks, which should not be considered as a signal. In order to avoid such situations, you can use lower-order timeframes, for example, five-minute ones.
Moreover, switching between timeframes is done in the same chart window so that the markup is preserved. A sell trade should be considered when the previous candlestick closes above the maximum open price of the day, and the current candlestick touches this level again, only from top to bottom.
If we are talking about a pending Sell Stop order, it should be placed below the maximum open price of the day.
With regard to the purchase, everything happens exactly the opposite. The price must go beyond the minimum opening level of the day. After that, it should return to the range, where there is an opportunity to open a buy deal.
Capital and risk management, some aspects of working with a strategy
The author of this technique advises to open positions starting from 16.00 Moscow time. However, this is just the author's recommendation. Traders can trade using this method at any time, taking into account the time zones in which they are located.
To minimize risks, it is recommended to place stop orders. For sell trades, you need to place a protective order just above the maximum price for the day (not to be confused with the maximum open price for the day). For buy trades, the stop order must be set just below the daily minimum price (not to be confused with the daily opening minimum price).
As for profit targets, there are several ways to close a trade. First of all, as soon as the price is in the profitable zone (from 5 points), the stop order can be moved to the breakeven level. As for directly closing positions, you can do this after reaching a profit, for example, in ten points. In addition, profit-taking can be done near the opposite line. Some traders use a trailing stop when working with this system.
At the beginning of the description of this strategy, at the preparation stage, the levels of the maximum and minimum prices for the day were marked. What is it for? If the price breaks through one of these marks, the likelihood of a transition to the trend increases significantly. Accordingly, growth or decline may continue, making it impossible to work with this system.
Traders who work with this strategy can take advantage of multiple entries within one hour. If the price goes beyond the maximum opening price several times and returns to the range, this opportunity is worth using.
Given the fact that the work is carried out at short distances, the profit for the strategy is usually insignificant. Accordingly, it is best to use currency pairs with low spreads. For competent capital management, it is not recommended that the amount of risk exceeds 1% of the deposit. Moreover, there can be quite a lot of entries to the market during the day.
Now let's look at an example of working with this system. The screenshot above shows the hourly chart of the GBP / USD currency pair. The price is close to the maximum opening mark of the day. Accordingly, you can switch to one-minute timeframes for a more accurate determination of the entry.
On the five-minute chart, you can see that the price stays above the maximum opening level of the day for some time, and then declines below this mark. This is the right time to open a sell position.
A stop order in such a situation is placed just above the maximum price for the day. As soon as the price moves in the direction of the forecast 5 points or a little more, you can move the stop order to the breakeven level or place a trailing stop order.
When working with this strategy, it is very important to ensure that a new minimum or maximum opening level does not appear on the hourly chart. If this happens, it is necessary to apply the counting anew, taking into account the new extremum of the open price.
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