One of the more popular, or better known, trading strategies in Forex circles is “Big Ben” method. This strategy is named after the famed London landmark for two reasons- it is specifically targeting British Pound, in the GBP-USD pair, and is designed to be used after London opens for business. It is a day trading technique and entirely technical, disregarding any fundamental input. Cornerstone of the strategy is in a fact that trading volume in GBP-USD expends dramatically after London opening, typically causing relatively large move, by comparison to preceding swings.
Many variants of the Big Ben strategy have been developed, but the core is something like this: initial moves when after Frankfurt opens (an hour before London) establishes daily opening range for GBP-USD. Within next hour, as the volume grows, real first move of the day starts, going through high/low of the Frankfurt swing. Purists of the method would look for a move in opposite direction, reversal, using mostly 5M charts. Stops are typically tight and relative to the returns sought. For example, some variations of the technique suggest targeting 20 pips, while others would make it dependent on the total range of previous hourly bar. Many combinations are possible, but once chosen, specific one should be traded for some time (50,100, more?) trades in a disciplined, systematic manner.
It is not my intention to dive into specific of GBP-USD Big Ben strategy- subject has been analysed to death, and beyond, in countless articles over the years. What is often overlooked, however, is the fact that many other currency pairs also experience increase in activity at that time. Euro, Swiss Franc and their respective crosses tend to behave in a similar to GBP-USD, by staging large moves after London opens. There is nothing shocking about. Bulk of trading in most currencies is done during domestic business hours. Interestingly, though, other, less obvious currency pairs also start moving during this time. One of them is USD-CAD.
Read more about
Big Ben strategy for Canadian Dollar. 
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November 16th, 2009, 07:25 PM
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