Most people exit the market late in the day on Friday. The reason is that most people don’t like to be in the market over the weekend because events can cause a dramatic change in the currency market by the open on Sunday (EST). The market on Friday had dropped dramatically on then drew back before working itself into a range of trading to finish the day. Typically, when the London session is closed on Friday, trading will often go sideways.
Late Friday prices had moved to the upper part of this consolidated range. To me this means that traders who were selling were getting out of the market so buyers needed to take part. This would cause a larger number of people to exit their trades either late or at the open on Sunday night as holders saw some of their profits being taken. As can be seen from the chart below I entered a Sell Stop that was actually taken out and made some pips. I decided this was a weak response to Friday’s end and expected the momentum to drop further on Sunday at the open, back to at least the previous low. That is exactly what happened. When it reached the bottom of Friday’s consolidation the market had bottomed and a recovery was expected. There is a RSI Negative Reversal signal that preceded the entry an hour earlier. Result, 30 pips at the open. Next, wait for a momentum condition to present itself in the markets this week, then look for the signal and time to enter.
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