An experiment...
I was cut off from trading at 7:00 AM, so before logging back onto the Internet at around noon, I noted in which direction the hourly trends were heading to see what would have happened had I purchase binary option contracts at the top of the 8:00 hour pointed in that same direction.
There were a number of "mis-colored" candlesticks, which would suggest that the odds of the contract being in-the-money at expiry would be that much greater
unless the asset was in the beginning stages of a reversal. I have highlighted these pairs in bold print.
The bullish pairs were...
AUDJPY
AUDUSD
WUE
The bearish pairs were...
AUDUSD
EURGBP
RESULTS:
AUDJPY did not rise at 8:00 AM, as anticipated. Instead, it reversed direction and headed south. However, this reversal lasted only one or two hours. At 9:00 AM, the pair reversed direction and headed north again, and continued to do so at 10:00 and 11:00.
AUDUSD did, in fact, head south as anticipated. But to be honest, it continued rising to
such a degree at 7:00 AM that by 7:59, the hourly trend had
probably switched to bullish.
EURGBP continued downward, as anticipated, and continues to do so.
EURJPY did not rise at 8:00 AM, as anticipated. Instead, it reversed direction and headed south. But to be honest, it fell to
such a degree at 7:00 AM that by 7:59, the hourly trend had
probably switched to bearish, in which case, the red 8:00 candle would have been a
continuation of this direction (
unlike what AUDUSD did). Following the red candlestick, EURJPY turned around and headed north, and has continued to do so.
EURUSD was a repeat of AUDUSD (i.e., headed south at 8:00), except that it maintained its new bullish sentiment thereafter, whereas AUDUSD stayed more-or-less neutral. Note however that though the overall trend continue north, the color of the hourly candlesticks switched back and forth between green and red.
GBPJPY is a repeat of EURJPY, except that it DID rise at 8:00 AM. (Again, following this green candlestick, it has continued to head north.)
GBPUSD did not fall at 8:00 AM, as anticipated. Instead, it reversed direction and headed north. But to be honest, it rose to
such a degree at 7:00 AM that by 7:59, the hourly trend had
probably switched to bullish, in which case, the green 8:00 candle would have been a
continuation of this direction. Following the green candlestick, GBPUSD has continued to head north.
USDCAD did the same thing as GBPUPY except that after the green 8:00 candlestick, the bias/sentiment turned neutral.
USDCHF is pretty much like USDCAD except that the 8:00 candlestick was red instead of green. (The same for USDJPY.)
Conclusion: If I want to benefit from noting the hourly trend, I need to purchase contracts hour after hour to take advantage of the flow. Just picking a given hour arbitrarily could be disastrous if the pairs happen to decide to reverse direction at that time.
