Before I digress from my recent EUR focus into the world of ETFs, here’s one last post on my straddle setup that has over the last month proved 100% reliable. First step was to find a narrow range consolidation (preferably
The NR criterion is accomplished looking back to 11:00 and the channel was exactly 15 pips ( 1.3677-1.36.92) going into the 15:00 US market close, when the order was initiated. A 15,15,10 straddle is then entered: 15 pips above and below the channel bands to enter, 15 pip limit to exit and a 10 pip trailing stop/stop loss. While 15 pips may not seem like a lot if you put on 2 or 3 lots there’s $300-450 return with very little (and limited) risk exposure. As mentioned previously, most of these setups tend to occur during the Asian session although in this case the core of the setup was during US market hours. While the same straddle could be applied to FXE the problem there is the leverage (or lack of) and the likelihood (or lack of) that the straddle will execute during US hours. The spot market (FX) clearly offers a significant edge when putting on straddles in this time frame. In subsequent posts I’ll explore using shorter time frame straddles on FXE to accomplish similar ends
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