Over my year of experience trading forex, I started to notice that price tends to make small reversals at the the end/beginning of every new hour. This is useful knowledge to me because now I know that I don’t have to sit with my eyes glued to the computer waiting for price to come into my favor in order to jam profitable stops. HOWEVER the most important confirmation that I see is a doji candle at the end of the hour. One reason this theory might be true is because news releases occur on the hour. Anyways I would try to analyze somewhere between 10 minutes before and after the hour for a doji candle.
What this strategy is mainly used for:
-To have a trade be more likely to be instantly profitable so you can quickly jam break even stops that are profitable
-To give you about 40 minute time intervals between each hour to think clearly and not freak out every 5 minutes.
-To give you another leading indicator of when price may begin to finish retracing and start to reverse.
-Makes active trade entries easier if you prefer not to use a limit order.
What this strategy is not used for:
-It is not a pure scalping strategy to me, AGAIN I use the strategy so I can quickly make my trades risk free.
-I’m not very sure if this strategy could be applied to news events.
-I do not use this strategy without other important technical indicators.
-It is not useful at telling you where to place your stops BEFORE you enter the trade. As if you would expect to place your stop near the last 5 minute candle stick at the end of the hour.