Before the London market opens, is it still difficult to discern the direction?

Since 2016, with events such as the US presidential elections and ongoing unpredictable global situations, it is suspected that it tends to be hard to determine a direction, so we may be entering an era where discretionary trading is especially difficult.

That said, it’s not the case that any EA will do; that has always been true.

For this reason, we conducted tests from January 2016 onward, when a sense of direction is believed to be hard to determine.

The results are shown below.

In the top figure, with a 10,000 currency units trading, up to 3 positions were held.

In the top figure, the MT4 tester's results are arranged in order of net profit, from highest to lowest, by Japan standard time.

The top row, i.e., the time with the highest net profit, is around 6:00, followed by around 3:00, 7:00, and 4:00.

Around 11:00 and around 20:00 also performed reasonably well.

There were five time zones with poor results: around 15:00, around 2:00, around 14:00, around 5:00, around 16:00.

Trades during these times tended to be negative, with larger drawdowns and lower profit factors.

Around 14:00, 15:00, and 16:00 are times before the London market opens, when announcements and rumors can create confusion, making direction hard to determine.

Here, we call the five time zones with poor results Normal Time, and all other times Good Time.

The results of trading only during the Good Time periods are as follows.

The top figure is an MT4 report for trading only during Good Time periods from January 2016 onward.

Trading lot size: 0.1

Number of trades: 444

Net profit: 501,760 yen

Maximum drawdown: 46,980 yen

Win rate: 87.61%

Profit factor (total profit / total loss) = 3.14

Average profit: 1,892 yen

Average loss: 4,260 yen


By the way, on the “MT4 Time Select Tool EA RSI USDJPY 15-minute chart” page, data is also published for all time zones including Normal Time, but trading only during Good Time yields a smoother equity curve.

By the way, in the recent USD/JPY market, the downside has been firm, but if it turns up without breaking the September 19 high of 111.878 yen, it may form a long Elliott Wave 5.