Good Night Strategy - Aroma of Fresh Profits in the Morning
We all love, turning on the terminal in the morning, to discover profits. Make yourself a cup of hot coffee and leisurely view Forex analytics and news from the world of millionaires ....
Today we will talk about a trading system called “Good Night”. In general, this is a derivative Forex strategy, the inspiration for which was one of the most popular systems considered on our site - “Va-Bank”. In fact, Good Night is an adaptation of Va-Bank for daily charts.
The strategy is notable for its simplicity and low time consumption.
- Platform: Metatrader 4
- Currency pairs: EURCHF, AUDUSD, AUDCAD, GBPAUD, GBPJPY, GBPCHF, GBPNZD, CHFJPY, EURAUD, CADJPY, AUDNZD, CADCHF, EURNZD, EURCAD
- Timeframe: H1 + D1
- Trading time: 1 time per day, at 22:00 on the terminal time
- Recommended brokers: Alpari, Roboforex, TickMill
Main idea of the strategy
The basic postulate is something like this:
Any abnormal action must have an appropriate counteraction. If an unusually large candle has formed on the chart, a correction should be expected the next day.
A logical question arises, how to determine how large a candle should be? In fact, the solution is quite simple. To do this, we will compare the distance covered by the price for today with the average value of daily volatility.
Average daily volatility can be easily determined from the online table. The pips column displays the average volatility in points. In adjacent columns, the same value in arbitrary units and in percentage terms.
If a pair has passed over the day by 50% (or more) more than its average daily volatility, then there are preconditions for correction, i.e. movement in the opposite direction.
Installation and setup
There are a lot of currency pairs, and viewing each chart manually may not be very convenient. To facilitate this task 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 standard instructions.
After the indicator starts, a list of currency pairs and candle sizes will appear on the chart. The indicator shows information on the size of daily candles for instruments available from the market review. The line displays the opening, closing prices, spread value and candlestick 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 see the data for the last day, you need to substitute the number 1. The function can be useful if for some reason you are late for the entrance, and did not manage to enter the position in the evening of the current day. The second parameter is responsible for the frequency of updating information. If true, the information is updated on each tick, if false, on the opening of a new candle in the current chart.
By default, the indicator picks up all the symbols from the market overview, so for starters you need to remove unnecessary symbols from the list. To do this, right-click on the market overview window and select “Symbols”. Through the opened dialog box, you can add and remove symbols from the scope of the indicator. Through the context menu, you can also, by selecting the appropriate items, show or hide all symbols at the same time (in this case, only symbols of already open charts remain in the market overview).
Similar to the Wa-Bank strategy, currency pairs are divided into groups.
- Group (5 to 1). These include priority currency pairs, the probability of which is 5 to 1 or more.
EURCHF, AUDUSD, AUDCAD, GBPAUD, GBPJPY
- Group (4 to 1)
GBPCHF, GBPNZD, CHFJPY, EURAUD, CADJPY
- Group (3 to 1)
AUDNZD, CADCHF, EURNZD, EURCAD
1) So, at 22:00 we begin to search for the bodies of large candles (using the indicator i_vabank) As a rule, the size of the candle should be 100 points (1000 for a five-digit sign) or more (for pairs with low volatility it may be less). Next, we compare the size of the candles with the average value of volatility, and all the pairs that have passed 50% more than their average volatility, we write out on a separate sheet of paper (or just remember).
2) After that, we turn to our groups to choose the most worthy tools for trading. For example, if the pairs from the first and third groups have passed a comparable distance, then of course you should give preference to a currency pair from the first group. That is, we always give preference to groups of the highest rank (2nd is better than 3rd, and 1st is better than second).
3) When we have already chosen the most preferred pair, it is time to enter the market. You must always enter in the direction opposite to the direction of the large candle. By analogy with Va-Bank, we set a take profit of 50 points and a stop loss of 100 points. This, in fact, is all trading for the current day.
The next day, repeat the same procedure. The exception is Friday night and Monday opening. Accordingly, we open deals on Monday, Tuesday, Wednesday and Thursday. Already open trades can hang for several days until they close in stop or take. This is normal.
Strategy shows itself best on the EURCHF pair. Actually, in order to increase the percentage of profitable transactions, it is enough to limit yourself to this pair only. We use classic management, not more than 3% per transaction. To calculate the trading lot, you can use a special calculator.
The Good Night strategy takes a minimum of trading time and does not require constant monitoring of charts. This is a fairly rare example of a system that combines sufficiently high efficiency and ease of trading. Just remember that no strategy is safe from losses, so always follow the money management, even if at some point you managed to win several transactions in a row.