Japan open and 50 pip move.
One of the reasons I do not advocate trading key US data releases is because of the sheer quantity of players that jam into trades and the high probability of a whipsaw effect in the first 15 minute candle bar. For example, assuming that US Housing data came out as very strong and you were actually short EUR/USD prior to the data release on the morning, the usual tussle between the bears and the bulls may mean that your short may get stopped out quickly on an up move before the second fifteen minute candle plunges down. Yes, that's a great possibility and it;s very annoying to know that you may have been right with your market direction but you still got stopped out because of the huge volatility.
I prefer watching the dull, quiet, stationary market prior to Japanese market open because the potential for direction is enormous and the probabilities of large volatility whipsaw effects are much smaller.
The above chart is a good example how sleepy Tokyo wakes up and stirs to a 50 pip move.
Targeting small moves like this day in and day out is far more reliable than waiting for a big data release and hope for a large swing trading 200 pip tsunami move. With the big moves comes high risk and the possibility of a wipe-out. There is money in the daily trading ranges from Asia to Europe if you take a closer look at the behavioral charts reflected through candlesticks.
Have you ever wondered why seasoned veterans survive in the US currency futures markets? It is because they know how to scalp the small ticks. Be humble and book small profits and let your small trades accumulate in time. Be patient; this is a patience game. Don't hurry yourself into large winning trades."They stumble that run fast." If you are humble you will spot Mado windows every time for 10-20 pip quick trades an you can scale-up when you know momentum is on your side. But always trade with tight stops and if you take a knock on the chin, brush it off!
Trade with wisdom and find strength in the little, subtle changes in price action. Pattern recognition becomes your most formidable ally.
