Re: Power Hour Breakout Strategy
Hello Dave,
The Power Hour breakout strategy is a course which we used to teach in the past, but have since been re-working the strategy to make it more effective.
We currently do not yet teach it, though we may do so again in the coming months.
It is an intraday strategy which takes advantage of the shift of trading activity from one trading zone to another. The strategy takes advantage of a certain recurring pattern, which occurs around the European (Frankfurt) open and London open.
It works best with the British Pound (specifically the Gbp/Usd), because this pair has a
relatively small movement during the Asian trading session (which precedes the European trading zone), thus giving the trader a narrow consolidation channel.
Other currencies like the Usd/Jpy or the Gbp/Jpy have a more continuous trading activity which carry over from the Asian trading session to the London trading session.
Statistically the figures show that Gbp/usd trading activity is very thin during the Asian trading session, but subsequently accounts for app. 23% of the London trading session, which is almost a quarter share of this volatile trading session.
The technique looks to exploit the spike in trading activity which occurs when the European traders enter the market.
The large traders, such as the interbank dealing desks, the commercial traders, hedge funds etc use the thin trading of the Gbp in the Asian session to get an accurate picture of the supply/demand of this currency.
This information is used to trigger stops on both sides of the market, thus resulting in new intraday highs/lows. Once this is done, the Gbp is ready for its real intraday direction, which is what the strategy aims to capture.
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