This trading system is based on trading at specific time. What you will do in this trading system is you look at the chart at 5:30 GMT time in the morning to execute your trade. You say it drawback or advantage of the system that you have to get up at 5:30 GMT in order to open position in the market. The system basically is focused on the higher volatility which happens in the beginning of the European trading session. Additionally, the unique combinations of indicators give the higher probability estimation on the direction of the future movement.
The system consists of three basic components.
- Momentum Indicator
The momentum indicator measures the speed of the market. In other words you should be buying when the price is gaining high momentum and selling when the momentum is declining. In this system we use the momentum with the period 60.
- Commodity Channel Index- CCI
The commodity channel index indicator is based on the assumption that the market moves in a cyclical pattern which means high and low of the price are formed in periodic intervals and in consecutive fashion. So in an attempt to detect those cycles we can detect the beginning and ending of the trend. CCI is used to help figure out the price reversals, price extremes and trend strength. This system uses the CCI with period 60.
- FxMorning Trade Indicator
It is an optional component of this indicator that simplifies the trading by checking the signal for us. One of the functions of this FxMorning indicator is to draw blue background on the main chart which indicates the start of our trading hour. If everything is set up correctly according to the previous steps we should buy or sell at the first candle that enters the blue zone.
The second use of the indicator is to give us helpful text information about the trade signal. This indicator checks the rules of the system and gives us a clear guide to whether go long, short or no trade. It also gives us the ideal entry price and profit target and stop loss levels.
Important- Time synchronization
We know that the time zones of various forex trading platform differs. In order to make this system work you should synchronize your broker’s time zone with the GMT time. This is quite a tricky one.
We will check for trading signal every day at 5:30am GMT, so we need to make sure our indicator is set up properly.
To determine the time zone of your broker, simply scroll the chart to the right to the very last bar,
And check what its time is (MetaTrader has to be connected and must receive data).
I can see that the broker time at the last candle is 18:45. When I’ll check the real time in GMT time zone, it is 16:42. The broker time is always rounded up to 15 minutes, so it won’t have 18:42, but 18:45.
From this observation I see that the broker time is two hours higher than current GMT time, in another words, it uses GMT + 2 time zones. So when in reality we will trade at 5:30am GMT, in MetaTrader platform of this broker we’ll see 7:30am.
Now we should set up our FxMorningTrade indicator so that it uses broker time. Click anywhere on the chart with the right mouse button, and choose Indicators List from the menu.
This will display the list of indicators that are on this chart. Choose FxMorningTrade indicator, and click on the Edit button.
Here, the BeginTime should be the time when we are checking for signal (which is 5:30am), but in broker time zone. We know that broker uses GMT+2 time zone, so we should change BeginTime to 07:30, and set EndTime to two hours later (09:30). Always use format HH:MM, for example 07:30, and not 7:30.
Click OK to confirm the dialog, and then Close to close the Indicators List window.
Remember Your Timeframe should be set to 15 minutes.
Buying conditions Using Forex Morning Trade.
- Momentum (60) of the 5:15 AM candle is higher than 100 and lower than 100.8.
- CCI (60) of the 5:15 AM candle is higher than zero.
Selling Condtions Using Forex Morning Trade.
- Momentum (60) of the 5:15am candle is lower than 100 and higher than 99.2 (in other words between 99.2 and 100)
- CCI (60) of the 5:15am candle is lower than zero.
Forex Morning Trade Stop Loss and Take profit.
Stop loss and take profit should be place 40 pips i.e. risk to reward ratio is 1:1
Open demo account to test this system.
Download Free Forex Morning Trade Trading System