This can be a great Nadex trading strategy, especially if your work schedule doesn't permit you to trade during the regular work day. It comes courtesy of Krystal Comber, founder of SlickTrade.net. She has been testing and trading this strategy for months with great consistency.
I tried this trade last night, but last minute nerves got the best of me and I bailed. If I had trusted the odds of success, I would have won, but instead, I cut my losses.
Almost every night, the EUR/JPY behaves quite predictably, and if you can draw support and resistance lines, it can greatly enhance trading consistency.
The rules for trading the EUR/JPY during the Asian session are quite simple:
- Select the EUR/JPY currency pair with the 11pm expiry.
- At 8:00pm EST, draw horizontal lines at the highest price (resistance) and the lowest price (support) between 6-pm-8pm on the hourly chart for the EUR/JPY.
- Switch over to 15 or 30 minute charts.
- Check to make sure there isn't any economic news occurring on the EUR or JPY from 8pm – 11pm EST.
- For a SELL – After 8pm, if the price breaks through the low price level – Choose a SELL on the closest strike price at or above the support line. You can place a market order if you want your order filled immediately, or you can place a working/limit order if you want to adjust your risk/reward. If you want an additional margin of safety, you can place a working order at the next strike price up the strike price ladder and hope that the market comes back to fill your order.
- For a BUY – After 8pm EST, if the price breaks through the high price level – Choose a BUY on the closest strike price available at or below the resistance line. You can place a market order if you want your order filled immediately, or you can place a working/limit order if you want to adjust your risk/reward. If you want an additional margin of safety, you can place a working order at the next strike price down the strike price ladder and hope that the market comes back to fill your order.
- That’s it! Price is normally tested heavily between 9pm – 10pm EST –You may wish to walk away during this point and come back around 10pm -10:15pm EST.
- Always pay attention to the trend direction and news. If the market is sideways and staying within the high and low range you may want to avoid taking the trade. This is why I like to watch the Keltner Channels and Fisher Transform on ThinkorSwim (TOS) or the EMAs and Ichimoku cloud on the Nadex charts.
Let's take a look at last night's trade (February 12, 2015):
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| Click Chart to Enlarge |
8:00pm - 11pm EST: The EUR/JPY broke through the support line at 8:25pm, triggering a SELL at 135.60, which was the closest strike price above the support. The following pending order was placed at 8:33pm:
Trade Details:
Contract: EUR/JPY >135.60 (11PM)
Expiration: Thu Feb 12 23:00:00 EST 2015
Direction: SELL
Quantity: 1
Price: 50.00
Contract: EUR/JPY >135.60 (11PM)
Expiration: Thu Feb 12 23:00:00 EST 2015
Direction: SELL
Quantity: 1
Price: 50.00
1 contract was sold, with a maximum risk of $50 and a maximum reward of $50.
The market chopped sideways for almost the entire session, and the trade was looking good. At 10pm, the market started to challenge the 135.60 strike price, but I remained patient. At 10:35, the market blew through my SELL strike price and kept heading upward. With 11 minutes left in the trade, I was convinced the market would not retrace. Indicators were bullish, and I decided to exit the trade for a $33 loss. And then it happened. BOOM! The market nose-dived without warning. My trade would have expired in the money and I could have let my contract expire in the money for a full profit.
I like this strategy, and I need to learn to trust it. To accomplish that, my next 20 trades on this strategy will be done in demo. I'm going to establish some hard rules and collect data. In the meantime, I will publish progress reports from my testing, including wins & losses, and a profit plan.
The market chopped sideways for almost the entire session, and the trade was looking good. At 10pm, the market started to challenge the 135.60 strike price, but I remained patient. At 10:35, the market blew through my SELL strike price and kept heading upward. With 11 minutes left in the trade, I was convinced the market would not retrace. Indicators were bullish, and I decided to exit the trade for a $33 loss. And then it happened. BOOM! The market nose-dived without warning. My trade would have expired in the money and I could have let my contract expire in the money for a full profit.
I like this strategy, and I need to learn to trust it. To accomplish that, my next 20 trades on this strategy will be done in demo. I'm going to establish some hard rules and collect data. In the meantime, I will publish progress reports from my testing, including wins & losses, and a profit plan.
About Krystal Comber:
Krystal is the founder of SlickTrade.net SlickTrade provides live trading rooms, signals and setups for Nadex, IG Group and Forex traders. Krystal provides the following services:
- Video tutorials for trading with Nadex
- Winning strategies with detailed instructions
- ThinkorSwim (TOS) workspace setups and indicators
- Live trade signals
- A private Facebook group and chat group
- A personalized online trading journal that helps you track your trading activity
- Live support
Free Nadex Education Reminder:
- Monday, Feb. 23 The Ultimate Hedge Strategy 6pm-7pm CST Register Here
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For a Complete Explanation of the EUR/JPY Asian Session Click Below
The Purpose of this Blog
Disclaimer
The opinions expressed in this blog are solely those of the author, and should not be construed as trading advice. I am not a registered or certified financial planner. There is a very high degree of risk involved in trading. Past results are not indicative of future returns. All individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein.
