Saturday, October 3, 2015

RESEARCH: Time of Weekly Highs and Lows on the AUDNZD

I spent today examining the AUDNZD and the time of its weekly highs and lows. For this analysis, I focused on the 4H chart, using data from 2013 and 2014. 

What days can we expect to find the weekly high or low? Interestingly, the most common day is Monday, followed by Friday and Wednesday. The least likely day is Tuesday. Results are below:

If we zoom in on the data, we can see what time the weekly high or low occurred (within each 4H block. 00:00 = NY Close).

Of particular interest is that 21.63% of the weekly high or low was found during the first 12 hours of Monday, and 18.27% within the last 12 hours of Friday. This means that 40% of the weekly high or low occurred during the first half of Monday, or last half of Friday. 

Weekly highs and lows also featured prominently during Wednesday and the first half of Thursday. Approximately 29% of weekly highs and lows were found within this timeframe. 


How can we use this information? I suspect that Monday morning breakouts may be profitable. This is something to look at, as it gives you the opportunity to profit from both the daily move on Monday, as well as the move for the whole week. This will be my next project. :)

Tuesdays and Thursdays look best for trading continuations.

Trading reversal signals on Wednesdays may also work. 

Be wary if trading intra-day on Friday, as there's a very likelihood of reversal during the latter half of the day.

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