Today I present you an overview of deals made using the Owl strategy – smart levels for the EURUSD, GBPUSD and AUDUSD currency pairs for the week from January 30 to February 3, 2023.
Now it is not an easy period for trend strategies because the market has been stuck in a small channel for a long time and it is not moving anywhere. This means that trend strategies can give a lot of false signals. But let’s see what we got.
For convenience and timely receipt of signals I use the Owl Smart Levels Indicator. The main trading timeframe is M15, while the H1 and H4 timeframes are used to confirm the trend direction of the higher timeframe.
Firstly, let’s look at the EURUSD pair.
The beginning of the week for the Euro was within the “Dead Zone” (the red zone of the Owl Smart Levels Indicator, in which it is not recommended to trade), but already at 7:00 on January 30, the first signal to buy the euro against the dollar appeared. The deal closed with a loss. After that I decided to include another rule in my strategy – not to trade on Monday morning. The market is just opening, there are very few major players, and many traders are only trying to look closely at the market and form a trading plan for the week.
Figure 1. EURUSD BUY 0.21, OpenPrice=1.0868, StopLoss=1.0861, TakeProfit=1.0891, Profit=-15$
The rules for opening deals on the Owl strategy – smart levels.
- At the moment of the appearance of a fractal directed towards the main trend (which is determined by the ZigZag direction on the older timeframes), we build a Fibonacci grid with levels of 38.2% and 161.8%.
- We place limit orders at the level 38.2% of the Fibonacci grid.
- We set StopLoss at 0% and TakeProfit at 161.8% levels.
- We delete the pending order if it hasn’t worked within the next 10 candles.
After chaotic fluctuations on January 31, the EURUSD market turned down and formed a signal, but already for sale: OpenPrice=1.0849, StopLoss=1.0860, TakeProfit=1.0814. The deal was opened with a risk of 1.75% of the deposit (the first 1.5% of the deposit), because the previous one was unprofitable. The Euro worked out this signal very well, and the profit was fixed on the open deal.
Figure 2. EURUSD SELL 0.16, OpenPrice=1.0849, StopLoss=1.0860, TakeProfit=1.0814, Profit=+56$
After some fluctuations and another shift into the dead zone, the upward movement recuperated. On February 1, at 15:03 GMT, a Buy deal was opened with a minimum stop size of only 8 points (digits = 4). Profit was fixed on this deal very quickly, and the market has already tuned in for another rise.
Figure 3. EURUSD BUY 0.19, OpenPrice=1.0896, StopLoss=1.0888, TakeProfit=1.0924, Profit=+53$
At 21:01, another buy trade was opened which closed quite quickly but made everyone nervous, as the market went down and was literally 1 point away from StopLoss. Then the EURUSD pair went up very far and the correction had to wait until the next day. And on February 2, the dead zone appeared again and did not allow trading until the end of the week. Only at 13:30 on the Non Farm Payrolls news, all EURUSD timeframes began to show a downward trend direction. But after such news it is better not to enter the market because it is very volatile and unpredictable.
Figure 4. EURUSD BUY 0.11, OpenPrice=1.0902, StopLoss=1.0888, TakeProfit=1.0947, Profit=+48$
Next, let’s focus on the GBPUSD pair.
The British Pound, like the Euro, opened the week in the red zone, which did not allow it to trade all day on January 30th. And due to the chaotic multidirectional movement, the first deal was opened only at 9:45 on January 31. She created a nervous atmosphere, as she moved from the profit zone to the loss zone for a very long time, but in the end she has reached TakeProfit.
Figure 5. GBPUSD SELL 0.15, OpenPrice=1.2323, StopLoss=1.2333, TakeProfit=1.2293, Profit=+45$
The next sell signal did not take long to wait, but I have a rule – not to open a trade earlier than 10 candles after the closing of the previous one. So I skipped the next trade.
Figure 6. The Rule – not to open a trade earlier than 10 candles after the closing of the last one
Further, the market behaved chaotically. The strategy did not give entry signals, and eventually the dead zone was formed in the afternoon. Only on February 2, after 17:00, the British pound managed to get out of the dead zone, but on this day the strategy did not form signals.
Only on February 3, at 9:00, it was possible to enter the market. GBPUSD closed my trade with a loss and fell again into the red zone. After that I decided not to trade the GBPUSD currency pair anymore this week, besides, the strategy did not give any more signals.
The strategy also works well on AUDUSD pair.
The first trade in the Australian dollar opened at 10:00 on January 30th and closed with a profit only at 00:30 the next day. Another sell signal appeared almost immediately, but according to the rule not to trade 10 candles after closing the deal, this signal was ignored.
Figure 7. AUDUSD SELL 0.13, OpenPrice=0.7086, StopLoss=0.7098, TakeProfit=0.7050, Profit=+45$
The next perfect signal appeared on January 31 at 7:45. Profit was fixed on the open position within one hour. This is what I call the “Perfect entry signal”, when the market does not move from side to side but immediately goes towards TakeProfit after a rebound from the level.
Figure 8. AUDUSD SELL 0.17, OpenPrice=0.7034, StopLoss=0.7043, TakeProfit=0.7007, Profit=+45$
Then the market began to correct upwards and after one false signal, on which a loss was received, the Australian dollar entered the Dead Zone. The market left the red zone only on Friday, but after the news about employment in the US, I do not recommend trading, moreover, there were no more signals.
Figure 9. AUDUSD SELL 0.19, OpenPrice=0.7048, StopLoss=0.7056, TakeProfit=0.7025, Profit=-15$
The week from February 6 to February 10, 2023, I think, will be more intense for signals on the Owl strategy. Last week there were 2 fundamental news: the decision on the US interest rate and Non Farm Payrolls. I believe that this will set the direction for the corrective movement in the dollar which we have been waiting for so long.
