TRADING STRATEGY


FX


• Figure 2 shows the weekly market structure behaviour for the same.


• Table 1 explains the legends in the graphs.


• Figure 3 and Figure 4 show year-on-year detail for GBPUSD


Figure 1 – Daily Market Structure Behaviours across 9 Pairs


Key observations are as follows:


• The ‘Structure’ value represents traditional higher/ lower highs/lows, in contrast to Outside and Inside Days/ Weeks, and is the combination of the higher/lower values.


Figure 2 – Weekly Market Structure Behaviours across 9 Pairs Teme


Outside Range


Comment


HH&HL Day2/Week2 presented higher highs and lows than Day1/Week1 LH&LL


Day2/Week2 presented lower highs and lows than Day1/Week1 Day2/Week2 presented higher highs and lower lows than Day1/Week1


Inside Range Day2/Week2 presented lower highs and higher lows than Day1/Week1 Structure


Table 1 - Legend


Daily and Weekly timeframes, and nuances in behaviour between both.


• Figure 1 shows the daily market structure behaviours for nine pairs, between 2010 and 2016.


Combination of HH&HL and LH&LL – % of standard market structure activity


• ‘Structure’ is useful in contrast to Outside ranges, because the stats show that, if we have broken the previous daily/weekly high or low, there is less probability of breaking the other high or low. And if price is approaching that other level, we look for opportunities to trade according to the


microstructure behaviours we study.


• The weekly behaviours differ from the daily in that there is a lower probability of outside weeks – approx. 1 in 10 rather than 1 in 5. This is indicative of the confirmatory information embedded in higher timeframe levels and structure, with


FX TRADER MAGAZINE October - December 2017 49 price


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