Last updated on 2020-07-26
This PIN was inspired by the thread Forex 10 Bar Strategy started by Zondervan. I suggest you read the thread, but I’ll try to summarise the strategy here:
The 10 Bar strategy does not use indicators and essentially works by counting the number of bull bars that a pair generates in the ten hours up to London Open. So if your server is GMT+2 you simply count how many of the ten H1 bars from 00H to 09H server time closed higher than they opened. This gives you a number between 0 and 10. We take 5 to be neutral, less than 5 indicates short, more than 5 indicates long. This appears to give a very basic indication of sentiment … i.e. which way is the price trying to go.
Now it gets a bit more complicated, but also where it gets more interesting. We use USD-based pairs to create an expected value for the non-USD crosses. E.g. to get the expected sentiment for EURGBP we do this:
- EUR sentiment = number of EURUSD bull bars. e.g: 7.
- GBP sentiment = number of GBPUSD bull bars. e.g: 4.
- Expected EURGBP sentiment = EUR (7) + GBP (4) = 11. To bring this back into a 0-10 range we need to subtract 5. 11-5=6. So we expect EURGBP to have 6 bull bars.
- We now check the actual number of bull bars for EURGBP. e.g: 4.
- If the actual number (4) is less than 5 (which it is), and the actual is also less than the expected number (6 – which it is): SELL
- Similarly, if the actual number is more than 5 and is more than the expected number: BUY
- If the actual number is 5 we are neutral, no trade.
Note for ‘reverse’ pairs such as USDJPY we need to reverse the count because we want the right side JPY sentiment. We can do 10 minus number of bull bars, which is the same as counting the bear bars.
We don’t trade the USD pairs because we use these for our baseline, and following Zondervan’s post, we also ignore CHF pairs. That leaves us trading the following 15 pairs: AUDCAD, AUDJPY, AUDNZD, CADJPY, EURAUD, EURCAD, EURGBP, EURJPY, EURNZD, GBPAUD, GBPCAD, GBPJPY, GBPNZD, NZDCAD, NZDJPY.
So on to the PIN. The above logic is built into the PIN. You simply set the London Open hour based on your server time (default is 10 if your server is GMT+1). At the beginning of that hour, the PIN will do the calcs and set the signals. These signal will persist for 24 hours or until you reset the PIN.