Hi everyone, this is my trade for today on the common sense trading logic using High and Low. If you have been trading, or at least immersed yourself with Forex trading for a while, you should notice that the least volatile period for the majors excluding Yen belongs to the Asian session. During this period, the price action for the Euro and Cable moves like snail and operates within a narrow range. The volatility will come back when it is near the European open and that is where I get ready to aim for a good scalp. Here's how I did it today:
At 0600H GMT, we can determine the Asian High and Asian Low of the Day by then. Today, in case of Cable was at the High of 1.9324 and Low of 1.9268. With the price action moving at a slower pace waiting for the big players to come in, set a buy order at the Asian High and a sell order at the Asian Low of the Day. Setting orders using this method will usually yield at least 10 pips for you without much sweat. As you can see from the chart on GBP/USD, my sell order was hit at the Asian Low and then rallied all the way down to 1.9220. Regarding the take-profit, depending on your lot size, you can opt to take-profit at TP1 or wait later for the hourly candle bar to materialize to take profit at TP2. This depends on your risk/money management. The key point here is to take note of your entry.
Decided to file this as a trading setup since this is one of the methods I use frequently.
Please use the SDX indicator contributed by Big Joe to plot out the buy and sell order price for you at GMT 0500H.
FX Operator