Trading AUD/JPY on Wednesdays

This fundamental trading strategy exploits the tendency currency pair AUD/JPY is statistically more likely to fall during the penultimate hour before swap accrual on Wednesdays. This day of the week is special because on Wednesdays the swap is three times higher than on normal days (two weekends are charged as well). It is unknown why AUD/JPY, a pair with a traditionally positive swap, is sold 1-2 hours before swap accrual. Perhaps traders (or rather hedge funds) with large long positions prefer to partially close at this time, so as not to rock the market too much.

As they say, find a trend - try it, and the fact that the unusual behavior of AUD/JPY is logically explained is a reason to take a closer look at it thoroughly.

Marketplace: Forex;
Currency pairs: AUD/JPY;
Timeframe: H1;
Indicators : not used;
Strategy: fundamental;
Protective orders: not set.

Rules of the trading strategy

At 23:00 Moscow time (GMT+3 or GMT+4 during Daylight Saving Time), open a short position. Do not set StopLoss levels or TakeProfit. When the new bar opens (0:00 already Thursday) close the position.

Examples of a trading strategy

Wednesday 2009-10-14 Wednesday 2009-10-21

   

Wednesday 2009-10-28 Wednesday 2009-11-04

   

The sample charts show the last four Wednesdays (October 14, 21, 28 and November 4, 2009), the H1 bars that were formed at 23:00 Moscow time are marked with a red ellipse. If traded every Wednesday from January 7 to November 4, 2009, the total statistical profit from bullish positions in this hour will be 400 pips (over 44 weeks). This is about 9.1 pips per trade, which is higher than the average spread on AUD/JPY (5 pips). Sure, the strategy makes a loss on some environments, but generally speaking, with long-term use, forex strategy - is profitable.