Seasonality Intra-day Trading System
EUR/USD Intraday Seasonal Patterns
Before looking on how the intraday seasonal patterns portrait the market it’s important to be aware that we can divide our trading day into four major trading sessions: the Sydney session, the Tokyo session, the London session, and the New York session. During each of these sessions, liquidity is not distributed uniformly and this is one of the causes why these seasonality cycles appear on an intraday basis.
See "Best Time" image under Intra-day section
Note* - 14GMT 10ET is green color - forex option release
Next, we’re going to look at two types of intraday seasonality cycles that will help us improve our FX game:
Intraday Volatility tendency;
Intraday top/bottoms tendency;
In the below figure we show the EUR/USD volatility in pips per hour of the day from the beginning of the year. This chart shows the EUR/USD tendency to have two main peaks in volatility:
One at around 7:00 GMT, with the maximum ATR(Average True Range) around 28 pips;
The second one between 13:00-15:00 GMT, with the maximumATR around 34 pips;
See "Volatility" image under Intra-day section
So, how is this information going to help you?
If you’re daytrading it will help you to time your trades much better. It will help you enter the market only around the time of the day when the ATR is at pick and it can show you a realistic expectation for the trade and how far away your TP should be.
Moving forward we’re going to look at the 10-year intraday seasonality cycles and EUR/USD top/bottoms tendency.
Usually it can be seen that the major intraday bottom is around 12:00 GMT right before the New York session so if your strategy for any given day is generating a buy signal this seasonality charts will help you time the market much better so you’ll be better off to wait for the 12:00 GMT before starting to buy.
In the same circumstance, you should avoid buying at around 8:00-9:00 GMT as usually around that time EUR/USD produces an intraday seasonal top.
See "Intra-day Average 10 yr" image under Intra-day section
Note* 14GMT 10ET - Forex Options can change price direction "EX. short"
The EUR/USD technical pattern should look familiar. We’re trading right into resistance level which means that we should expect a reaction lower. Secondly, from the intraday seasonal pattern, we know that right around 8:00 GMT we should expect a top to develop.
From the intraday volatility tendency, we also know that we have a pickup in volatility right around 7:00 GMT which again means that the reactions lower from resistance level should be significant. By using this information we could have sold EUR/USD at 8:00 GMT using a profit target that is in accordance with the intraday seasonal pattern.
Seasonality Trading Strategy
We know that 13:00 GMT usually produces the low of the day. The technicals also suggest that we’re near support level which means that a bounce is more likely to happen so we better take profits. Or at 14:00 GMT watch for a change in price direction because of the forex options release. Search internet for "forex options release" for what days they are to be released.
Before looking on how the intraday seasonal patterns portrait the market it’s important to be aware that we can divide our trading day into four major trading sessions: the Sydney session, the Tokyo session, the London session, and the New York session. During each of these sessions, liquidity is not distributed uniformly and this is one of the causes why these seasonality cycles appear on an intraday basis.
See "Best Time" image under Intra-day section
Note* - 14GMT 10ET is green color - forex option release
Next, we’re going to look at two types of intraday seasonality cycles that will help us improve our FX game:
Intraday Volatility tendency;
Intraday top/bottoms tendency;
In the below figure we show the EUR/USD volatility in pips per hour of the day from the beginning of the year. This chart shows the EUR/USD tendency to have two main peaks in volatility:
One at around 7:00 GMT, with the maximum ATR(Average True Range) around 28 pips;
The second one between 13:00-15:00 GMT, with the maximumATR around 34 pips;
See "Volatility" image under Intra-day section
So, how is this information going to help you?
If you’re daytrading it will help you to time your trades much better. It will help you enter the market only around the time of the day when the ATR is at pick and it can show you a realistic expectation for the trade and how far away your TP should be.
Moving forward we’re going to look at the 10-year intraday seasonality cycles and EUR/USD top/bottoms tendency.
Usually it can be seen that the major intraday bottom is around 12:00 GMT right before the New York session so if your strategy for any given day is generating a buy signal this seasonality charts will help you time the market much better so you’ll be better off to wait for the 12:00 GMT before starting to buy.
In the same circumstance, you should avoid buying at around 8:00-9:00 GMT as usually around that time EUR/USD produces an intraday seasonal top.
See "Intra-day Average 10 yr" image under Intra-day section
Note* 14GMT 10ET - Forex Options can change price direction "EX. short"
The EUR/USD technical pattern should look familiar. We’re trading right into resistance level which means that we should expect a reaction lower. Secondly, from the intraday seasonal pattern, we know that right around 8:00 GMT we should expect a top to develop.
From the intraday volatility tendency, we also know that we have a pickup in volatility right around 7:00 GMT which again means that the reactions lower from resistance level should be significant. By using this information we could have sold EUR/USD at 8:00 GMT using a profit target that is in accordance with the intraday seasonal pattern.
Seasonality Trading Strategy
We know that 13:00 GMT usually produces the low of the day. The technicals also suggest that we’re near support level which means that a bounce is more likely to happen so we better take profits. Or at 14:00 GMT watch for a change in price direction because of the forex options release. Search internet for "forex options release" for what days they are to be released.
Bình luận:
Here is the site for forex option releases
orders.forexlive.com/
orders.forexlive.com/
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