The BIG BAN Strategy

The BIG BAN Strategy.

Big Ben is a currency-specific trading strategy designed to captured the first direction al intraday move that often occurs within the first few hours after the Frankfurt/London market openings which begin at approximately 1 am EST or 13.00 WIB.

The strategy woks best with the British pound/U.S dollar (GBP/USD) rate. Because this currency rate trades lightly outside London trading hours, the surge in trading every morning in the U.K gives it a “real” market opening, which the strategy looks to exploit. Figure 1 shows pound/dollar trading is virtually non-existent during Asian trading hours. When London opens, however, the pound/dollar accounts for nearly one-quarter of all forex trading. Currency rates with more continuous, 24-hour trading will have les of a distinct open/close as they pass through the different money centers. For example, the dollar/yen rate (USD/JPY), which dominates forex activity during Asian trading hours (78 percent of volume), still accounts for 17 percent of trading during European hours. Before explaining the specific logic behind the methodology let’s take a look at what needs to occur for a trade to set up.