Trading tips for GDP pairs

Trading Tip of the Day/Strategy

This is both a trading tip and a strategy. Listen up, this is very important and will help thousands of you, I wish someone had told me this when I started trading. As usual I will make this Simple. A large Volume of the flow of value passes through British Banks. This is very important. This means that there is a lot of volatility during the beginning what is called the London session (10am – 6pm). There is a reason for this; Lets imagine Mercedes Benz factory in Zurich Germany wants to buy 10 000 gear assemblies from Rolls Royce UK. The Mercedes accountants face a nightmare here because they cannot buy these parts in Britain using their local currency, they have to buy these parts using Great British pounds Sterling (GBP). And so the accountant at Mercedes will contact a UK bank so that he can buy GBPs. But Let’s say the accountant filled the order when the British banks had closed due to the difference it Time Zones, this means that he will have to wait until tomorrow morning for his transaction to be completed when the British banks open. Now Imagine many orders like this from many companies and organizations from all over the world coming through British Banks, this means that in the morning when British banks open, there are a lot of orders carried over from yesterday that are being filled all at once, hence the spike in volatility during the London open. This is good news for the trader, especially the scalper! It means every morning when the British banks open, he will experience a spike in volatility all across the GBP currency pairs and he can collect a few pips here and a few pips there (and that’s a lot to choose from). But there is a secret here also. This also means that at around the hours of 9-10 and 10-11 am, the GBP will be at its lowest price or highest price. So if the GBP is strong on a steady uptrend, the GBP will be its lowest price for the day during these hours. The same is true for the reverse. This is true roughly 85 percent of the time. And so a strategy based on this alone is very successful