Are you ready for an Awesome Article?
I am going to get into a lot of good stuff Today:
- Extremely High Winning Percentage
- Realistic Gains
- Trading Against the Banks
- Using a Risk to Reward of Less than 1/1 (ahh, scary!)
- And lots of other Great Stuff!
Listen, I am not writing some bogus article that talks about different things you could use in your strategy or something like that, I am going to teach you a Real Winning Strategy.
All I ask in return is that you leave a comment and let me know what you think.
Now, before I get into all of this great stuff, let me tell you that this is actually not the typical strategy that you will hear us training on. Typically, we are using more “normal” strategies that focus on Technical Analysis and look for trend continuation, breakouts, bounces, reversals, etc. and we are always talking about putting the odds in your favor with a positive Risk/Reward ratio so that you only need to win 20 or 30 percent of your trades to be profitable.
While I still highly advocate those types of strategies, the one I am going to teach you today is a whole new approach to Forex Trading. Rather than scanning all the major crosses for solid technical signals and looking to enter with filters and confirmations with a target much bigger than your stop loss; THIS strategy focuses on taking advantage of certain market conditions, not using ANY technical signs or information and using a negative Risk to Reward ratio.
Again, all of those things are not exactly “typical” for what we want to do in a strategy, but there is a factor to a strategy that is way, way more important than any of the details we have already mentioned…
At the end of the day, you cannot ignore the most important factor of any strategy, and that is how much money it makes. And the strategy I am going to teach you today is doing quite well in that area as noted above.
So what is the strategy all about?
The strategy is designed to extract money out of the “Quiet Time” in the Forex Market. The Quiet Time happens, using New York (EDT) Time from 5PM to 2AM. In other words, Quiet Time is after the main players in the New York Session are done trading and before the main players in the London Session have begun to trade.
During this time, the Market tends to float very slowly and quietly (hence the name) which provides some extremely high probability trading opportunities. Because the market is floating very consistently back and forth, there is a very high percentage chance that when it over-extends itself to one side (Up or Down) that it will come back the other way to center itself in the Quiet Time.
Now, to make more sense of this, let me show you a chart where the Quiet Time is highlighted in Green:
What you will notice is that when it is not Quiet Time, the Market moves pretty good, but as soon as the Quiet Time begins, the market slows to a crawl and simply floats back and forth. The reason it is doing this is because for most of the pairs during this time there are no major banks involved; which means that you, at this time, do not need to compete with major institutions driving price way up or way down against you.
Another reason that it is so quiet is that most traders, even retail traders, have taken trades in other sessions and are waiting for the next “real session” to move price into their stops or targets. In other words, the vast majority of traders are taking signals during other sessions and the vast majority have stops and targets that won’t get hit in the Quiet Time so there is no reason for the market to get shaken up due to orders going in or trades closing out.
Now, the strategy is not as simple as buy into every move down and sell into every move higher—I wish it was, but it is just not that easy.
The first thing you have to realize is that not all pairs are created equal in this situation. For instance, because Quiet Time is during the Asian session, trading the JPY is a BAD idea. Most pairs will not have major banks or institutions trading them, but JPY crosses can because its during their own session. Another currency that you shouldn’t trade during this session is the USD. This is because the United States Dollar is the most heavily traded currency in the exchange, so its never smart to use it in a Quiet Time situation.
I could go on and on about what other pairs you may want to consider or not consider, but I will just spill the beans now and tell you that these pairs are the best for this strategy:
EUR/CAD and GBP/CAD.
Yep, just those two. We’ve tested and tested and re-tested, and simply found that these two pairs have a great balance of Quiet Time consistency, yet just enough movement to help you hit your targets. They also tend to float back to the price that Quiet Time opened about 75% of the time, so your winning percentage can be sky high!
Take a look at our last 623 Trades on these 2 Pairs:
We’ve won 86% of our last 623 trades with these two pairs because they are the best pairs in the Quiet Time setting.
So know that you know why we want to trade in the Quiet Time and what we want to trade in the Quiet Time, let’s talk about HOW we want to trade in the Quiet Time.
This process is pretty simple using the basic Manual Trading strategy (in other words, not using the highly complex Automation Program that you are seeing the stats for in this article).
Here are the Rules for Trading the Strategy Manually:
- Mark the open price of Quiet Time (5PM EDT)
- Put a Short Pending Order in 15 pips above the open price (12 Pip Stop, 10 Pip Target)
- Put a Long Pending Order in 15 pips below the open price (12 Pip Stop, 10 Pip Target)
- As soon as an order is taken, cancel the other order.
- If a trade is still open when Quiet Time Ends (2AM EDT), or neither order is filled, Close everything.
The above rules are the basic Manual rules you’ll want to use if you are trading the EUR/CAD and GBP/CAD during the quiet time. Like I said, it isn’t quite the same as a complex program that can take into account a million more things than a human being and can react more quickly as well.
With the manual numbers in mind and the likelihood of hitting around 75% of your trades, your results would look something like this over a 100 Trade Span:
25 Losers @ 12 Pips = – 300
75 Winners @ 10 Pips = + 750
Net +450 Pips over 100 Trades
These are hypothetical numbers, of course, and would be altered by partial profits being taken and other management details, along with fluctuation market conditions.
Remember when I talked about a negative Risk/Reward ratio?
That’s where this comes into play. Because the trade is already set up with a negative R/R plus trade management will make that worse by taking small profits and break-evens, the account ends up with a less than idea average win vs average loss:
Notice how much the numbers change in REAL LIFE because of market conditions, trade management control, break-even trades, etc.
You can see why it is important to have such a huge winning percentage when the risk to reward is not much better than 2 Risk to 1 Reward, but the numbers show how powerful the strategy can be due to the consistent market conditions.
So I have told you all the great things about this idea, but now we need to talk about the negative side because there is some of that too.
One big downside to this strategy is that the spreads can get ugly during this time. Often times, because of the “easy to trade” conditions, brokers will heighten their spreads to 6, 8 or even 10 pips on these crosses which makes trading much more difficult.
There are two ways to fight the spread issue:
- Get a broker with better spreads (no broker will be great during the quiet time, but if you go from a broker with 10 pips to one with 4 pips, you probably just went from unprofitable to profitable).
- Have an automated system monitor the market for the time when the spread drops to the ideal level and execute the trade at that instant. (not everyone can do this part, so option #1 is probably more feasible)
Another issue is that it’s difficult to execute a strategy with perfection especially when there is timing and tons of screen time involved. When you have to be in front of the PC for the entire session and ready to open or close trades or cancel orders, there is a lot of room for mistakes; unfortunately, each mistake will have a huge impact on the net profitability of the system.
So, as a manual trader of the system, you must be on your game. Little slip ups can take this from wildly successful to a drained account!
Speaking of wildly successful, this would be a great time to define what an incredible strategy should return.
Unfortunately, many people are claiming to have systems that make 100% in one month or in one week and I have ever heard 100% in one hour!
If that is what you are looking for, you have come to the wrong place.
A system that returns those numbers does not exists and never will exist. Someone who returned 100% in a week would be the richest person in the world just months after beginning to trade—and you would have heard of them!
A very, very impressive system would be something that returns between 5 and 10 percent a month on average. This is actually beyond impressive, it is Elite.
Know this guy?
The most successful and wealthy investor of our time….
He makes an average of 12-15% a YEAR. So, if you think someone is making 100% a day, you need to come back to reality.
That said, there are strategies using Forex and leverage that can return bigger gains than even what Warren Buffet makes.
And for us, anything in the 3%/Month (on average) or higher range is an INCREDIBLE return on investment because it means that your account can compound into massive wealth over a relatively short period of time.
As an example, let’s look at the 7% a Month that our Quiet Time strategy is currently avaergaing assuming that you have a 10,000 dollar account:
So, anything that turns 10 thousand dollars into a Million in just a few years should be considered an amazing return—please understand that.
Hopefully, with some reasonable goals in mind and the details of the strategy you feel ready to tackle the Quiet Time!
We do have an automation program that takes the strategy to the next level for those that are interested in it, just send an email to us at email@example.com
Hope you enjoyed this article, please do leave a comment!
Latest posts by NathanTucci (see all)
- Why is a Trading Room Valuable? - February 12, 2015
- USDJPY and EURUSD: Post Non-Farm Trading Update - February 6, 2015
- What to do when your Retirement is not big enough for you to Retire… - February 4, 2015
Winner’s Edge Trading, as seen on: