We examined the advantages of trend-following and mean-reversion in Asia-Oceania time, European London time, and NY time.

When I first started making EAs, I thoroughly investigated for any biases across the Asia/Oceania time, Europe London time, and NY time zones.

In addition to the already widespread carry-trade and London fixing, I looked for any rules that might be like a holy grail.

An so-called anomaly-based rule.

In the end, I found that baseless anomalies do not work.

Time passed, and about two years after I began creating EAs, I found a rule: from the time Europe participates until the London fix, trend-following logic tends to work, whereas from the London fix to around noon the next day in Japan time, counter-trend has an advantage.

In rough terms, considering MT4 server time GMT+2 (winter)/+3 (summer), 7:00–17:59 is favorable for trend-following, and 18:00–6:59 is favorable for counter-trend.

Japan does not observe daylight saving time, so when considering Japan time, summer and winter are offset by one hour, making calculations cumbersome.

The Japanese FX market is smaller than London and NY, so I stopped centering my analysis on Japan.

Now I consider 7:00–17:59 server time as the favorable period for trend-following.

7:00 server time corresponds to 13:00 in Japan during summer time. In winter, it is 14:00 in Japan.

Is this the time just before European participants join, when Dubai opens, perhaps?

18:00 server time corresponds to 24:00 in Japan during summer time, and to 1:00 a.m. in Japan in winter.

Exactly the London fix time.

The London fix is equivalent to the “mid-rate” in the Tokyo market.

After the London fix, NY moves the market independently, but because day traders close their positions, it is thought that the market tends to reverse.

Therefore, the favorable period for trend-following is from when European participants begin to participate up to the London fix.

Now, let’s consider the favorable period for counter-trend.

I have an EA called Reversal Seven.

This EA uses seven counter-trend methods.

The deployed logics are the following seven.

All are counter-trend methods.

■ Deployed logics

No.1.RangeRange// Entry from server time 7:00 to 17:59

No.2.PriceActionInsideBar// Entry any time, 24 hours

No.3.IchimokuSignalTrade// Entry from server time 18:00 to 5:59 the next day

No.4.BollingerBand// Entry from server time 22:00 to 0:59 the next day

No.5.PriceActionTrading// Entry from server time 18:00 to 1:59 the next day

No.6.MorningReversal// Entry from server time 22:00 to 2:59 the next day

No.7.TokyoTrend// Entry 7:00–17:59 Japan time

After looking at the seven EAs, do you notice anything?

The entries are listed at certain server times, yes.

And you can see there is a bias toward those time windows.

No.1.RangeRange is a trend-following type EA and enters during the favorable server time of 7:00 to 17:59.

No.2.PriceActionInsideBar enters at any time, 24 hours.

Other than these, the times are centered on late night to early morning Japan time.

The so-called morning scalping EA trades in the early morning Japan time.

The rationale for morning scalping EAs is as follows.

The London and New York foreign exchange markets handle some of the world's largest trading volumes.

If a large trend occurs on a given day, day traders close their positions within that day.

The timing of position settlements is just before the London session ends or during the time when the New York market is open.

In other words, after the London fix, the day's trend is likely to move against the trend.

The above views are what I felt while developing EAs, and I think there are other interpretations as well.

For example, analysis methods of carry-trade and London fixing trades.

As you know, markets move for various reasons.

The advantage of using MT4 is that long-term backtesting allows you to examine robustness over very long periods, such as ten or twenty years.

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