This document provides a step-by-step guide to trading the daily PIP cycle strategy, which aims to capture intraday reversals at the London session open by identifying ranging Asian markets. The strategy involves marking the Asian high and low range, setting alerts to enter on a break of the range, and targeting the opposite side of the Asian range. While it is a high probability strategy when the Asian range is flat, it may also work on trending Asian markets but with lower odds. Traders are advised to backtest extensively and manage risk, as with any edge-based strategy.
This document provides a step-by-step guide to trading the daily PIP cycle strategy, which aims to capture intraday reversals at the London session open by identifying ranging Asian markets. The strategy involves marking the Asian high and low range, setting alerts to enter on a break of the range, and targeting the opposite side of the Asian range. While it is a high probability strategy when the Asian range is flat, it may also work on trending Asian markets but with lower odds. Traders are advised to backtest extensively and manage risk, as with any edge-based strategy.
This document provides a step-by-step guide to trading the daily PIP cycle strategy, which aims to capture intraday reversals at the London session open by identifying ranging Asian markets. The strategy involves marking the Asian high and low range, setting alerts to enter on a break of the range, and targeting the opposite side of the Asian range. While it is a high probability strategy when the Asian range is flat, it may also work on trending Asian markets but with lower odds. Traders are advised to backtest extensively and manage risk, as with any edge-based strategy.
This document provides a step-by-step guide to trading the daily PIP cycle strategy, which aims to capture intraday reversals at the London session open by identifying ranging Asian markets. The strategy involves marking the Asian high and low range, setting alerts to enter on a break of the range, and targeting the opposite side of the Asian range. While it is a high probability strategy when the Asian range is flat, it may also work on trending Asian markets but with lower odds. Traders are advised to backtest extensively and manage risk, as with any edge-based strategy.
The key takeaways from the document are that the Daily Pip Cycle strategy aims to grab liquidity during periods of equilibrium in the market by entering on breaks of Asian session highs and lows during peak London session hours.
The Daily Pip Cycle strategy is based on liquidity. It aims to enter trades on reversals at the break of Asian session highs or lows in order to grab liquidity from buyers or sellers.
For the Daily Pip Cycle strategy to work best, the market needs to be ranging during the Asian session to create periods of equilibrium between buyers and sellers. A ranging Asian session provides the necessary liquidity for the strategy to identify reversal entries.
THE DAILY PIP CYCLE
Step by step guide
Introduction
First thing, be sure to have learnt the order block
strategy before jumping to this strategy. Without the foundation you will struggle.
Take your time understanding the concept and
acknowledge that this is an edge and every edge will have failed set ups. However, understanding that an edge is for long term profitability.
So why use this strategy?
This is ideal for those who are looking to trade intraday set ups during London session.
The entry criteria no different to our order block
strategy, you simply need to understand the why. The cycle Below is the set up in a very basic visual representation
So lets try and understand the theory and the
reasons why this happens The Theory
The theory is based on the liqudity. Simple as that.
We all know by now that liquidity is what fuels the market and this strategy is based on grabbing liquidity and running.
So, whats the backstory?
During the Asian it is believed to be a 'ranging' or 'consolidating market' Now what do we know about consolidating markets and how the markets function? Ranging markets = Equilibrium between buyers and sellers. Everyones happy. Will this last? Of course not mate!
So, the idea is to grab liquidity from either the
sellers of buyers and the reversing. Our entry is that reversal.
Make sense so far?
The Theory
So what is ideal for this strategy to work?
You need a ranging market during the Asian session. By now you all should able to distinguish between a ranging market and a trending market. why do you want a ranging market? Because of the equilibrium in the market, we need that liqudity hunt. If market is trending, this not only make liquidity grabs unclear but it lowers the probability as there is no question of institutions looking for higher or lower prices as the trending markets will already show its hand and intentions. You may use this on trending markets but bare in the mind the win rate and probability. The Edge: Step 1
Now, once London opens, this is when you have to
be ready. Why during London? The first 2-3 hours is the most liquid time in the markets and if this set up was to play out it will do so during this session.
So how do you set it up?
On any time frame you are comfortable with, mark
our the asian range high and low and set an alert. The Edge: Step 2
Great, you have set your alerts. Now we wait for a
break of either the high or the low.
Once you alert goes off, it is time for getting an
entry now. So in terms of entry, how do we do it? It is the same entry patterns either pattern one or 2 and you can enter at entry type 1 or 2, the choice is yours and to find what you prefer. The Edge: Step 3 Wait for our two rule entry to show. Then you know what to do next. Trade without fear and with full confidence in the edge.
In terms of timeframes, this is a personal
preference as to which time frame you wish to get an entry from. Never forget the fractal nature of the market. It will all replicate. The Edge: Step 3 Continued Targets where do you put it? Simple, for the asian range high or low depending on if you are buying or selling.
Alternatively you can manage the trade as you see
fit. If this is pro trend, my be wise to take partials and leave a little volume to run. Or if its counter set a hard TP. But the choice is yours how you manage the trade not mine. The key facts
Remember this is an edge, it will have losing runs.
You need to trust the edge for longevity. Remember the theory and logic behind everything you do. Never forget that. No logic no trade. Market runs on liquidity and that is exactly what this edge is built on. We are essentially entering on an LG. When we break the asian range, do we need to react off an OB? - No you do not. Doesn't always do this. If you see our entry pattern take it with confidence. If it reacts to an OB this is simply a confluence for you at this point. What pairs? This is up to you. Generally GBP, EUR and USD pairs work well. Stick to majors purely for the liquidity Trust the process and back test over and over till you are confident. I cannot give you confidence, this what you have to practice and develop. High probability = When asian range is ranging. When asian range is trending - probability is low but it's up to you to test to see what you prefer. US session - this is either a reversal or continuation of London. We will never know. Its up to you if you want to hold for TP or close at US session. Enjoy the process and love the art of trading TRADE SAFE