Fri 20th Aug

This could be viewed as a buy or sell day. On the D chart Thurs was a red hammer that could not follow through above 1.6500. RSI had rolled over but not crossed 50 line or its average.

There was the potential to lose money in the London session but this should have again been recovered (plus) in the US move. 1hr above its RSI 50 line, above its 8 lwma.

Thurs 18 Aug

A very messy day, largely held within a 50 pip range.

Wed 17 Aug

A massive move down that was the UK MPC minutes news release.

The 1hr closed positive back into the trend, above the RSI 50/8 lwma. This set up a string of higher lows into the US session.

Yet again the head fake was down and the major move happened in the US session.

Tues 16 Aug

Whilst there are good sells in line with the 1hr these are again counter trend to the D and 4hr charts.

Again the LO head fake is a move down. The US session is the biggest mover and the green 1hr hammer is shown on the 5 min chart with the red line at 15.55. There are several higher lows that follow.

Mon 15 Aug

Hindsight is a wonderful thing but going into this week the D chart shows a positive close and then a higher close hammer last Friday. RSI is crossing the 50 line/red average line so a generally positive day can be expected on Monday. The 4hr chart is above its 8 lwma, RSI 50 line, RSI crossed upwards, all positive and suggesting trend up.

The 3 candles on the 1hour are 6am gmt (arrow down), 8am gmt (left arrow up) and 12 gmt. If your focus is up due to the D and 4hr charts you might not sell after the 6 gmt shooting star, or if you did sell accept its counter trend and be happy to bank pips.

From the 5 min chart. There is a nice counter trend lh sell arrow left. There is a hl buy before the close of the 1hr candle back into the D/4hr chart trend. After the positive 1hr close there is a hl right on the round number 6300 that most likely would have hit a small stop.

The 1hr is now moving up, we are above 8 lwma and above the RSI 50 line. The 1hr candle closes are shown and the higher lows, see the 2 right arrows up. It seems the LO head fake is the move down today. Price eventually runs up to 1.6410 with the US session continuing the London direction.

Trading ideas and days review.

Whilst we no longer really trade Frankfurt, the hour (FH) before London opens (LO) we have looked at numerous charts. Generally we would not trade 2 moves in the same direction as half way through FH there is a strong chance of a reversal.

We will look at trading higher lows and lower highs (1 2 3 tops/bottoms) and double tops/bottoms at this time (FH/LO).

After 9.30 gmt you are more likely to get the bigger moves of the day forming. So trades in line with 1hr at close of 9am gmt candle can be considered. If the move is small then the LO head fake has not yet shown itself. A reversal then will most likely signal the bigger move for the day. Chances of London having 2 big reversal trades are slim.

Chances are that this move will continue to 5 day ATR and then may have a London Close trade reversal.

LO head fake Fri 12 Aug

Perhaps a difficult head fake to figure out. The eur 1hr hammer certainly gave a trade which gu didn't (large body neg close but decent wick reject of Asian lows).

LO head fake Thur 11 Aug

Again the move up into LO was a fake. London open session did very little again. The eur in particular gave better trades. If you were looking to sell the eur doji's at the highs were better sell candles than the gu positive close inside bar.

LO head fake Wed 10 Aug.

There were several losing trades today.

GU move into LO was a fake up move, today eur did have successful hl trades until the Asian highs were hit and the big moves were lower. Any losing trades in morning session were again more than made up.

LO head fake Tues 9 Aug.

Today the eur was sideways, perhaps due to the FOMC decision due that evening. GU again did very little in the morning needing the US session to come in for direction. The move up into LO was again a fake though.

London open head fake Mon 12 Aug

I have put on a couple of lines that show 8 am and 9 am gmt. Also a couple of obvious support and resistance lines from the Asian session.

Today for both currencies the move up at LO is the head fake that shows the trend of the day. I have some of the clear lower highs. GU did have a couple of losing trades but would have been a comfortable winner on the day still.

Just one comment on eur, the x trade. This is a type of 2b trade that I have seen frequently, a counter trend move before the US open that fails and moves back into the trend of the day. I am very careful taking counter trend moves before the US open and want decent 1hr set up candles and not a 15 min reversal candle.

London Open head fake

I have long thought that if you can get the London open head fake right then you'll have a good chance of trading successfully. You have a chance of getting the direction of the day correct. That of course doesn't guarantee success, if you are using small stops you still have to get your entry correct.

I'll post a few charts from this week for eur and gu. They might have a few things in common such as a move around London open that reverses.