This study reveals several pieces of information that could contribute to testable trade ideas. For example, short the EUR/USD following a higher-close wide-range bar, especially if it closed in the top 10 percent of its range and U.S. economic data was released that day. Similarly, go long after a lower close WRB.
Exit the trade one day later. For a longer-term trade strategy, buy the currency pair on the fourth day after a WRB that closed in the upper portion of its range on breaking economic news, and hold the trade until the 10th day.
Other ideas to explore: How does European economic news affect WRBs in the EUR/USD? Also, does the currency pair react to intraday (i.e., fiveminute, 30-minute, one-hour etc.) wide-range bars in a similar way?
These scenarios may not lead to tradable price moves, but additional insight into the currency pair’s historical behavior will only help you make smarter trading decisions.
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