Trading strategy: EUR/USD High Noon

Description

The EUR/USD High Noon strategy is an uncomplicated trend-following trading strategy. Positions are opened on the basis of the market trend at a particular point in time. Positions are closed at a precise point in time. The strategy is used in forex trading for the EUR/USD.

 

  
Suitable for : Forex EUR/USD
Instruments : Spot Forex and CFD Forex
Trading type : Day trading
Trading tempo : 1 signal per day
Using NanoTrader Full : Manual or (semi-)automated

 

The strategy in detail

The EUR/USD High Noon strategy uses the MACD 12,26,9 (moving average convergence divergence indicator) to determine a trend. The chart time frame is 2 hours. The MACD is calculated over 24 hours (12 x 120 minutes).

When to open a position?

When the fast MACD (12) lies above the slow MACD (26) the market trend is positive. When, however, the fast MACD (12) lies below the slow MACD (26) the market trend is negative.

The EUR/USD High Noon strategy opens a position every day precisely at 14h00. A long position is bought if the market trend is positive. A short sell position is sold if the market trend is negative.

Note: traders who wish to proceed safely will consult the economic numbers calendar at the beginning of the day in order to see if any numbers are scheduled to be released at 14h30. Economic data can change the trade and it could be advisable to wait after they have been published.

When to close a position?

The EUR/USD High Noon strategy uses a stop. The strategy does not use a target. The stop is placed 100 pips (1.000 ticks) away from the entry price.

If the stop is not reached, the position is closed by the time filter at a precise point in time. The trader can choose between 20h00 and 22h00. Traders wishing to keep a position overnight select 8h00. Tick the releveant box in the Designer dialog window to indicate the time chosen:



 

This example shows two short sell trades. The positions are opened at 14h00. In both cases the stop (red line) is not hit. The trader opted to close the positions at 20h00. The first day the position is closed with a profit. The second day the position is closed at break-even.


Note: some traders apply this strategy with a profit target. Without a profit target the percentage of winning trades is about 53%. This means the trader cannot miss many trading days without the risk of having a worse ratio and much worse result. By adding a profit target, for example 30 pips, the percentage of winning trades increases to 70%.

 

Conclusion

The EUR/USD High Noon strategy is a trend-following strategy. The strategy opens a long or short sell position on the basis of the day’s trend as indicated by the MACD. The position is opened at precisely 14h00. The open position is protected by a stop. In most cases, however, positions are closed by the time filter at 20h00, 22h00 or 8h00 the next day, depending on the trader’s choice.

Practical implementation

In NanoTrader Full follow these steps:
  • Choose the instrument you wish to trade.

  • Open a chart with the template study "WHS EURUSD Nigh Noon".

  • Semi-automated trading? Simply activate the TradeGuard+AutoOrder or the AutoOrder function.