This is a follow up to yesterday’s post with the chart reflecting hourly bars over almost 5 days. The trade setup is pretty transparent and is based on the premise that overnight traders have a leading edge to the coming open and will react accordingly.Keep in mind that the time scale is based on Chicago time. Our goal here is simply to pick up some easy money from the the overnight surge and then get out at 8:00 just before the US equity markets open. As a conditional factor, we only enter long if the 8 bar SMA of 10 minute bars is up slope. The setup is reversed for short positions, additional details of which will be reviewed in a later post. A 15 pip stop loss helps to control potential reversals. Over the past 2 weeks this setup has produced some spectacular results and if you’re a FX trader this short term momentum setup may be worth a closer look.
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