Forex Strategy: The Amazing One Night Stand

Friday Breakouts in the Forex Markets

Friday breakouts taken in the direction of the established trend are one of the most robust breakout patterns tradeable. Rules for this strategy were released to the public over 20 years ago by system developer Joe Krutsinger and have continued to perform well to this day.* Joe Krutsinger named the system ‘One Night Stand’.

Rules for the system are as follows:

  • Buy only on Fridays— at one pip above the highest high of the last ten days— if the 10 day simple moving average is above the 40 day simple moving average.
  • Sell only on Fridays— at one pip below the lowest low of the last ten days— if the 10 day simple moving average is below the 40 day simple moving average.
  • If you get filled on either rule, exit on Monday morning’s open, or Tuesday morning’s open, if Monday is a holiday.

Money management stops can be applied to the system so as to contain risk. The closer your stop, the more likely it is you will be stopped out. Stops can be optimized based on a recent measure of volatility using an indicator such as the ATR (Average True Range).

Why has this system continued to perform well over the years?

Most Forex traders feel uncomfortable holding risk over the weekend. Traders who hold positions backed by an underlying strong trend over the weekend period pick up a risk premium for doing so.

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