Different Time Zone Analysis
Time zone selection is essential for successful day trading. Multiple time frame analysis is necessary to prevent missing the market’s significant flow. The most common form of time zone analysis is determining the price to enter through the hourly chart after identifying the overall trend through the day chart. This can prevent multiple risks of loss by first identifying the general trend and making decisions.
The trend-following trading strategy is one of the methods that global hedge funds use a lot. Meanwhile, many traders also prefer to range selling since they can earn a large profit when it is very volatile! Buy low and sell high strategies in the range market are straightforward, but traders need to be more aware of the market environment in which they participate.
Use Double Zero Branches
It is impossible to identify all support and resistance lines during day trading and to earn profit at all points. Therefore, for successful day trading, understanding at which price to enter a position is essential. Psychologically points such as Double Zero OR Round Numbers help identify these factors.
Double Zero means that the last two decimal places end in zero, such as 110.00 in USD/JPY. If the currency pair’s support and resistance lines are displayed as double-zero, it is more meaningful than other lines. It is not difficult to use this strategy, but traders who want to use it should be well aware of large banks and market participants’ psychology.
The reason why this strategy is working is simple. Large banks are in a very favourable position compared to other market participants because they handle large quantities of orders through conditional orders. Still, they are also aware of the impact these conditional orders will have on the market. Dealers often use this information to operate short-term positions through their personal accounts.
Most market participants put conditional order at the same or almost the same price level. Usually, traders take profit at the round numbers and set stop & limit orders above or below the numbers. Plus, since the foreign exchange market is a 24-hour global market, traders use stop and limit orders more than other markets.
Large banks are targeting the price range where these positions are concentrated through conditional bulk order flows. The strategy of focusing on Double Zero allows traders to be in the same direction as the market movers.
TRADING METHOD
BUY
1. Select a price range that is significantly below the 20-day moving average in the 10-minute or 15-minute chart.
2. Select a round figure price and place a buy order 10 pips below the selected price range.
3. If the market flow moves in the opposite direction from the entry position, place the stop order below the entry price of 20 pips.
4. When there is a double return, liquidate half of the position to take profit. Set a trailing stop according to the preferred method for another half of your fund.
SELL
1. Select a price range that is significantly below the 20-day moving average in the 10-minute or 15-minute chart.
2. Select a round figure price and place a sell order of 10 pips above the selected price range.
3. If the market flow moves in the opposite direction from the entry position, place the stop order above the entry price of 20 pips.
4. When there is a double return, liquidate half of the position to take profit. Set a trailing stop according to the preferred method for another half of your fund.
Best Criteria for Strategy
1. This strategy’s optimal conditions are most valid when no major economic indicators are published.
2. This strategy works well for heterogeneous currency and commodity currencies that move within a narrow range of migration, low volatility markets, and large traders in situations where stop orders are very tight.
3. This strategy is essential when major technical indicators are shown as estimates because they are a point of great psychological significance. If the price is close to the resistance/support level, moving average, Fibonacci level, and Bollinger band, the probability of success tend to increase.