Tuesday, November 24, 2009

ORB price extensions

I have been on an extended break from trading and am now in control of my schedule once again to analyze my chosen markets. Namely: GBP/JPY, GBP/USD, EUR/USD, USD/CAD and occasionally AUD/USD.

One of my favorite trade entries these days is a combination of the 1 hour ORB price level extensions coinciding with my CRB chart with VPOC levels. I know, an absurd amount of jargon. But really a very simple trade setup.

Here are the two annotated charts.

So the basic components are price extension fibs created from an opening range breakout (ORB), Market profile "Virgin Points of Control" or (VPOC) and the simulated price chart using Constant Range Bars with a setting of 20 pips (CRB).

Now, one question I am asking myself today is if a bias on the 1 hour chart creates more consistent returns using this setup or does it simply limit the amount of trades--which, in itself tends to reduce the sample set and improve returns over the short term.

The results of the trades for the past month on the EUR/USD with an hourly bias (created using a Volatility Pivot with an ATR setting of 7 periods; often referred to as the VP in my previous posts) are encouraging. But the question remains, does a bias improve my results? I will keep an eye on this over the coming weeks and report my findings.