Firstly, I cannot take credit for developing this strategy, the original creator is a trader called Udine who posted for a long time on ForexFactory.
All I have done is adapt his simple idea to suit my trading and it is a fantastic, simple tool.
The Theory
At the beginning of every hour, you will often find price accelerate towards certain levels. This strategy looks to capitalise on these moves. By using a currencies strength or weakness versus another currency, you can pick pairs that are likely to move in a particular direction if all the conditions are met.
Installation
Download the attached zip folder and insert all of the indicators into your MT4. Insert the template into your template folder.
File>Open Data Folder>MQL4>Indicators
File>Open Data Folder>Templates
On a 15 minute chart, right click anywhere and select load template. You can then choose 00 level trading and your chart will be ready.
Identifying a trade
Firstly, you need certain criteria to be met. You need both the daily and 1 hour direction to be the same. This is easily identified by the attached indicator. On the below example you can also see a list of 8 currencies ranked in order of strength. 1 being the strongest. The key element to being successful with this strategy is timing. The currencies strength/weakness rises and falls by every tick. Practice is certainly the best way of being able to identify the best currencies to choose.
The best times I have found to trade are on the Frankfurt Open (European Open), London open and New York open.
The entry criteria is to enter a trade when price reaches a 00 level. This is identified every 10 pips. Using AUDUSD as an example the first trade occurred at 0.7700 and the 2nd trade occurred at 0.7710.
Only one trade per hour.
Another example below. GBPUSD, entry at 1.2140 at the start of the London open.
Targets
The original method called for a 10 pip stop and a 5 pip target. Over time, I altered the risk/reward to try and get it as close as possible to 1:1. In general, I vary it from pair to pair. EURUSD is not going to move as much as say GBPNZD. You have to learn each pair and their volatility.
Any questions, feel free to ask!
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Originally Posted by Admin
