Good Night Strategy - the aroma of fresh profit in the morning

We all love, after turning on the terminal in the morning, to discover profit. To brew yourself a cup of hot coffee and leisurely browse forex analytics and news from the world of millionaires....

Today we will talk about a trading system called "Good Night". Overall, this is a derivative forex strategy inspired by one of the most popular systems reviewed on our website, "All-In". In essence, Good Night is an adaptation of All-In for daily charts.

The strategy stands out for its simplicity and low time costs.

The main postulate sounds approximately like this:

Any abnormal action must have a corresponding counteraction. If an unusually large candle has formed on the chart, the next day a correction should be expected.

A natural question arises: how large should a candle be? In fact, the solution is quite simple. To do this, we will compare the distance traveled by price today with the average value of daily volatility.

Average daily volatility can easily be determined from the online table. The pips column displays the average volatility values in points. The adjacent columns show the same value in conventional units and as a percentage.

If a pair has moved 50% (or more) beyond its average daily volatility in a day, then there are prerequisites for a correction, i.e. movement in the opposite direction.

There are many currency pairs, and manually reviewing each chart may not be entirely convenient. To make this task easier, there is an auxiliary indicator i_vabank, which you can download at the end of this review.

Install the indicator in the terminal according to the standard instructions.

After launching the indicator, a list of currency pairs and candle sizes will appear on the chart. The indicator shows information about the size of daily candles for instruments available from the Market Watch. The line displays the opening and closing prices, the spread value, and the candle body size (in five-digit points).

The indicator has only two settings. The first parameter (shift) is responsible for the time shift. A value of zero means the current day. To view data for the previous day, you need to enter the number 1. The function is useful if, for some reason, you were late with the entry and did not manage to enter the position in the evening of the current day. The second parameter is responsible for the frequency of information updates. With the value true, information is updated on every tick, with false, on the opening of a new candle of the current chart.

By default, the indicator picks up all symbols from the Market Watch, so first you need to remove unnecessary symbols from the list. To do this, right-click on the Market Watch window and select the "Symbols" item. Through the dialog window that opens, you can add and remove symbols from the indicator's visibility area. Through the context menu, you can also, by selecting the corresponding items, show or hide all symbols at once (in this case, only the symbols of charts already open remain in the Market Watch).

Similar to the Va-Bank strategy, currency pairs are divided into groups.

EURCHF, AUDUSD, AUDCAD, GBPAUD, GBPJPY

GBPCHF, GBPNZD, CHFJPY, EURAUD, CADJPY

AUDNZD, CADCHF, EURNZD, EURCAD

1) So, at 22:00 we begin looking for the bodies of large candles (using the i_vabank indicator). As a rule, the candle size should be 100 points (1000 for a five-digit quote) or more (for pairs with low volatility it may be less). Next, we compare the candle sizes with the average volatility value and write down on a separate sheet of paper all pairs that moved 50% more than their average volatility (or simply remember them).

2) After that, we turn to our groups to choose the instruments most worthy of trading. For example, if pairs from the first and third groups have covered a comparable distance, then of course preference should be given to the currency pair from the first group. That is, we always give preference to the higher-ranked groups (the 2nd is better than the 3rd, and the 1st is better than the 2nd).

3) Once we have selected the most preferable pair, it is time to enter the market. You should always enter in the direction opposite to that of the big candle. By analogy with Va-Bank, we set the take-profit at 50 points and the stop-loss at 100 points. That is, in fact, all the trading for the current day.

The next day we repeat the same procedure. The exception is Friday evening and the Monday open. Accordingly, we open trades on Monday, Tuesday, Wednesday, and Thursday. Trades that are already open may remain for several days until they close by stop or take. This is normal.

The strategy shows itself best on the EURCHF pair. In fact, to increase the percentage of profitable trades, it is enough to limit yourself to this one pair only. We use classic money management, no more than 3% per trade. To calculate the trading lot, you can use a special calculator.

The Good Night strategy takes minimal trading time and absolutely does not require constant chart monitoring. This is a fairly rare example of a system that combines quite high efficiency and simplicity of trading. Just remember that no strategy is protected from losses, so always observe money management, even if at some point you managed to win several trades in a row.

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Sincerely, Pavel Vlasov
TradeLikeaPro.ru