Automating the Forex US Open Market Behavior Trade

The Strategy

The idea behind this strategy is that when there is a trend (of a certain size and start and end time) in the European market the US Market will Power Punch it back (Reverse the European trend) and this fact can be used to trade the Forex market profitably(using stops and targets). There is another aspect that this technique needs the trend to be at least of a certain size for the strategy to be traded.

Automating the Forex Behavior Strategy

In order to automate this strategy an Expert Advisor needs to be developed with the following variables need to be catered for:

  • the start time for the European trend needs to be specified
  • the end times for the trend European trend needs to be specified
  • the minimum size of the trend needs to be specified
  • the size of the stop needs to be specified
  •  the size of the target needs to specified.

If you can get all of these variables correct you will have profitable trades

What the EA will do

  • The EA will record the price at the time specified,
  • Then it will record the price at the end time specified.
  • it will calculate the trend size.
  • It will then compare the trend size to the minimum trend size specified.
  • If the calculated trend is smaller it will stop.
  • If the trend is bigger it will:
    • open a trade in the opposite direction of the European trend
    • Using the target specified
    • and the stop specified

Next automation step

With the EA being developed it need to be back tested to determine likely settings that have worked in the past

Click here to go to the back testing process –  Back testing

 

An example of a recent test

A recent test of the GBPUSD produced the following results:-

The settings for the GBPUSD for the GMT hours using

  • start times of 5:00 to 7:30  ( 6 options using 30 minute gaps)
  • And end times of 10:00 to 12:30  (6 options using 30 minute gaps)
  • when set for a trend of 40 to 60 pips  ( 3 options using a 10 pip gap)
  • and stops of 40 to 100 and ( 4 options using a 20 pip gap )
  • targets of 80 to  140 give  (4 options given a 20 pip gap)

a total result that is 85% profitable over the last 6 months.

Total options: 6 x 6 x 3 x 4 x 4  =  1728 options

Of the 1728 options tested 105 were not profitable. So the success rate was 94% for the above bands which proves the theory

5 Comments

  • Menandro

    Reply Reply July 23, 2015

    Good day,

    To make this EA run its always on the computer? I’m working in construction we use Power Generation. But there is a schedule of power distribution. So when the power on again how do I know that the EA is still working after power off of our Generator use in our site. Do I need to reset it again the setting?

    Thanks, Andy

    • Alex du Plooy

      Reply Reply July 24, 2015

      Normally the EA resets after a power break – but if the breaks are big (a few hours) then using EAs becomes dangerous. It is best to use a VPS service which remains up all the time

  • Menandro

    Reply Reply July 25, 2015

    So its possible to load the EA in VPS service? Or its enough using VPS to stay open

    the chart in VPS but the EA attach to PC where is off.

    • Alex du Plooy

      Reply Reply July 25, 2015

      Yes – this applies to all EAs – A VPS service will ensure that your EA is running 24/7.

      The VPS service has nothing to do with the charts on your desktop or laptop. You can switch those off.

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