A strategy that the authors of the above publication say is supposed to identify higher-probability trading opportunities (Isn’t that what ALL strategies are supposed to do?) is the Opening Range Breakout Strategy. They mention that it typically focuses on EURUSD, but could be applied to any of the European majors. It works by identifying the high and low during the half-hour just prior to the London open. This is 11:30 PM to 12 o'clock midnight where I live here on the Pacific Coast. Having done so, traders then watch for a breakout of this range +/-10 pips or 1/10 of the daily Average True Range (ATR) and maintain above/below this level for 10 to 15 minutes. The idea is to try to detect a direction of the "flow" for the remainder of the day. From there, one needs to look to manage the bullish or bearish bias by focusing on one-, two- or five-minute charts and using a combination of moving averages (13-SMA, 144-EMA, and 169-EMA) and oscillators (RSI, stochastics, and CCI). Other factors to include are major news announcements (usually in efforts of avoidance) and the time of day (when major markets open/close, option expirations, fixings, and so on). If price is struggling near these events, usually spotted by a bullish/bearish divergence with an oscillator, it could be prudent to reduce the position size ahead of time. Additionally, this type of approach might help to minimize the emotional aspect to trading, because there is an identifiable area to know where you're wrong (the opposite side of the breakout’s high and low). As an example, the book uses the above mentioned moving average on a two-minute chart. But, since I don't have a two-minute charts, I converted the measures to fit a five-minute chart, which turned out to be SMA (5), EMA (58) and EMA (68). I did NOT use SMA (13), EMA (144) and EMA (169) on the five-minute chart, because failing to adjust for the changing time frame makes absolutely no sense to me! In any case, compared to the forecast models I use with Numerical Price Prediction, these are very good measures! (Though I feel the use of exponential moving averages could lead to confusion [i.e., headfakes], because if you look at the example below, you will see that there are times when the EMAs turn slightly upward when, in reality, the rate is ultimately still headed south.) I would note however that sometimes rates begin moving as early as ninety minutes prior to the London open, so I don't know if this would screw things up (or perhaps the pairs that do so typically are not the Euro majors). Moreover, since NPP is always focused on breakouts that breach the 60- and 20-minute price range envelopes at designated levels, there is no need for identifying the high and low during the half-hour just prior to the London open, and there is no problem if these breakouts occur at 10:30 PM as opposed to 11:30 PM, or any other time during the three primary trading sessions for that matter. I've also noticed that currency pairs have a tendency to reverse direction in the middle of the London session, so in my opinion, one had better not count on the initial breakout indicating the direction of the "flow" for the remainder of the day. Consequently, managing the bullish or bearish bias by focusing on SMA (13), EMA (144) and EMA (169) on a two-minute charts, or SMA (5), EMA (58) and EMA (68) on five-minute charts, would indeed be wise. But, from my perspective, this should be good enough. I see no need to ALSO consult oscillators such as the RSI, stochastic, or CCI. On the other hand, what I WOULD do is remain cognizant of where the limits of the two-, four-, eight-, and 24-hour price ranges are located, because these are the levels where reversals during the middle of the London Session are most likely to be observed—especially the 24-hour statistical AND temporal support/resistance levels, not to mention the eight-hour pullback level. One OTHER thing I would keep in mind is the direction of the day-to-day trend, because if a pair begins the London session on a trajectory contrary to this indicator, there is a significant probability that the asset might make a mid-course correction sometime during the European and/or American session(s).
.From an Eight-hour Perspective... As of Monday, December 19, 2022 | 2:00 PM PST AUDJPY dropped Saturday's bearish posture, having turned north about twelve hours ago. On Saturday AUDUSD was essentially at a decision point. Does it resume a downward trek, or adopt a new direction to the north? Presently, it hasn't really made a decision, with the eight-hour baseline looking more-or-less neutral. EURGBP abandoned its attempt to reverse direction and head south, having resumed an upward trek about nine hours ago. EURJPY switched from bullish to bearish on Friday. But, switched BACK to bullish today. The same for USDJPY and GBPJPY (but just barely, for the latter). EURUSD continues its mildly bearish journey. Having lost momentum, GBPUSD is now essentially neutral. USDCAD and USDCHF, which were solidly bullish, have now turned south.
.From a Monthly Perspective As of Tuesday, December 20, 2022 The close for AUDJPY is currently below the bottom of the projected monthly price range. However, the monthly trend turned bearish three or four weeks ago, so candlesticks could theoretically ride the lower band of the corresponding envelope south for an indefinite period of time. AUDUSD has been bearish ever since May 9, 2021. Nonetheless, price was on the rise for about eight weeks, until the rate reached the top of the projected monthly price range about two weeks ago. At that point, candlesticks began to descend. Consequently, I'm forced to conclude that the rate is likely to continue coming down, possibly all the way to 0.6232 at a minimum. GBPUSD is in a similar situation, except that its decline was "cleaner," and it is now evidencing a "clean" reversal north. So, even though it is presently positioned in the upper region of the monthly price range, I would not be surprised to see it opt to ride resistance upward nonetheless (nor would it shock me if it pulled back down temporarily [i.e., for a few weeks]). USDJPY is looking at almost the exact opposite scenario of what was just described directly above. USDCHF has been in serious decline for about five weeks now, yet almost the whole time, it has been at the very bottom of the projected monthly price range. Even so, the monthly bias/sentiment is not all that bearish. Consequently, I would be very wary about entering a buy-and-hold short position, given how much room the pair has for climbing up above.
From a Daily Perspective If you look at the daily chart attached below, you'll note that GBPJPY tends to go nowhere for several months at a time. At 159.22, it is presently at the bottom of the 12-day price range. So, will it initiate a climb sometime within the next few days? I'll be watching to see... USDJPY saw the approximation of its one- and two-week (thin black) trend lines turn south a couple of months ago. However, the rate has reached the bottom of a bullish (bold black) 40-day price range channel. So, will it join GBPJPY in initiating a leg to the north (if, in fact, that is what the Cable-Yen does) or will it continue to push southward? Again, I will be watching to find out...
After looking at only two (scalping) strategies, this task of comparing and contrasting suddenly became just a little bit boring to me. So, as I considered summarinzing the first idea the "Dummies" book had for swing traders, I realized that rather than summarize the strategy myself, I could probably find it already explained online, seeing as how both of the book's authors work at Forex.com. And what do you know? That is indeed the case. A description of their "Favorite Fib" approach can be reviewed by navigating to… https://www.forex.com/en-us/trading-academy/courses/advanced-technical-analysis/our-favorite-fib/ The strategy seems perfectly fine to me, so there's not really much I have to say about it, except that from a Numerical Price Prediction (NPP) standpoint, I find it rather limited. It's like there's just one thing you're looking to do, and you’re always looking to do it under pretty much the same set of circumstances, and in more-or-less the same way. It's not so much about analyzing price "behavior" and what that’s communicating to you as it is about just waiting for price to hit certain predesignated numbers, like a stage actor having to always hit his or her mark before delivering their lines. Personally, I like the flexibility that comes with also understanding the "story" being conveyed by price action, and being able to react accordingly, whatever set of numbers happen to be caught in the cross hairs or enjoying the spotlight at the time.
ANOTHER SWING TRADING STRATEGY https://www.forex.com/en/education/education-themes/technical-analysis/moving-average-crossover/ Like the Favorite Fib strategy, this one seems perfectly fine to me. The 4-, 9- and 18-period moving averages are very much in harmony with baselines employed by Numerical Price Prediction (NPP). However, I would multiply them by the appropriate associated "common factor" to evaluate or analyze a particular trade on lower time frame charts. On the other hand, as the authors themselves point out, the exits are very subjective; whereas NPP has temporal support/resistance levels AND statistical support/resistance levels (i.e., typical price ranges/price range envelopes) to assist in that regard.
Currency Trading for Dummies suggests only one (rather than two) strategies for position traders: the Ichimoku cloud. I don't really have any big problems with this suggestion, especially since they specifically state it is best utilized on daily or weekly (longer-term) charts. It omits the 4-period SMA included in the moving average crossover swing trading strategy. But, that's not a major problem as far as Numerical Price Prediction (NPP) is concerned, given that the comparable measure from that prior system, when it comes to NPP, is only a minor player. However, like the MA crossover approach, it DOES use the 9-period SMA, which NPP would regard as critical. (Note that Ichimoku cloud generates the moving averages by basing calculations on the average between the high and the low rather than use the close.) On the other hand, Ishimoku SKIPS the 18-period SMA (which NPP would not recommend doing), though it does include SMA (26), which approximates one of the three main measures (along with the 9- and 18-period lines) NPP would regard as most important. Like NPP (which plots a temporal support and resistance channel) the Ichimoku cloud factors in time by projecting the average of the 9- and 26-period SMAs from 26 periods ago into the present, along with the 52-period SMA from 26 periods ago. (It is the region between these two measures that forms the cloud). Nonetheless, the time-factoring manners in which NPP's channel and Ichimoku's cloud are utilized share almost no similarities whatsoever, and to be honest, I don't really see the necessity of waiting 26 periods before factoring the slower measures into the mix. For the authors' description on how to apply the Ichimoku cloud, I was going to suggest that you navigate to a particular Forex Factory web page, but I was unable to find anything that looked like an "official" instructional page.
.For the Beginning of This Week Though it's more bearish than anything, USDJPY is kind of neutral for the moment. Unless it decides to turn south, USDCHF looks set/structured to form a leg north sooner rather than later, and certainly not much below the 0.9187 level. USDCAD is very bearish at the moment. GBPUSD is just the opposite of USDCHF (i.e., looks set/structured to form a leg south sooner rather than later, and certainly not much above the 1.2417 level; and likewise GBPJPY, likely not above 161.30). EURJPY too, looks ready to continue the turn south it just initiated (at the end of Friday), but has plenty of room up above to pull back first, if it decides to do so. EURUSD is in a very similar situation. EURGBP is still very bearish, but has plenty of room up above for a pullback. AUDUSD is very much neutral. AUDJPY is kind of neutral as well, though technically, it is a tad bit bearish.