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Main » Articles » Trading Strategy

GMT Forex Strategy

The advanced trading strategies rely not only on chart reading and number crunching but also on the order flows analysis. This is my most favorite strategy and it is based on a simple fact - order flows related to position sizing. Most of the major US economic data are released at 1:30 PM GMT which is in the beginning of the US trading. These data could cause big price moves and make the environment more risky. That is why a lot of market players prefer to have smaller positions before the real action begins and they usually close part of them. This happens between 12:30 and 1:30 PM GMT. This is an advanced trading strategy and I will share only the general principles here. More information and real examples you can find in our Blog. The rules for opening a position are as follows:

Trading Rules

  1. The currency pair should be trending during the European morning trading. Usually this trend is in the direction of the breakout of the Asian trend after 8 AM London time. The strategy could be used also in ranging markets but the success rate will be lower.
  2. Around 12:30 GMT (it is better at least a few minutes after) the market nears support (if the trend was down) or resistance level (if the trend was up). If the currency pair breaks 10-15 pips beyond the level we should avoid the position.
  3. After the test of the support or resistance level we open a position in the opposite direction of the morning trend. A lot of filters could be used and I recommend developing and clarifying your own rules. You can find a lot of advice on this strategy and real examples in our Blog.
  4. After we open a position we use Stop and Limit according to our money management rules.
  5. http://forexsb.com/strategies/gmt-strategy.html
Category: Trading Strategy | Added by: forex-market (2009-10-15)
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