20 Pips Asian Session Breakout Forex Trading Strategy

 

Here we look at the Asian session Forex trading strategy which provides a typical example of a simple breakout strategy in action. This time period is a particularly good candidate for trading this type of range strategy.

April 23, at 6: But as soon as the London and European Forex market opens, the volatility and the volume increases and this causes price to breakout of the Asian session market consolidation.

Box Breakout Forex Strategy

Here we look at the Asian session Forex trading strategy which provides a typical example of a simple breakout strategy in action. This time period is a particularly good candidate for trading this type of range strategy.

The hours from the time London opens for business until New York closes are widely regarded as the best time to trade Forex, and with good reason. It is during these hours that the Forex markets usually experience the highest liquidity, i. High volume usually correlates positively with a high amount of price movement, which gives the retail Forex trader a chance to make money through directional trading.

This means going long or short of Forex currency pairs and hoping to exit with a profit. It is possible to trade Forex profitably by using either technical or fundamental analysis, or a combination of both. A common mistake made by many Forex traders is overcomplicating technical analysis. For example, the simple fact that the price is higher than it was a few months ago is probably going to be more significant and reliable than the exact value calculated by some fancy complicated indicator.

It is usually meant to refer to the high and low prices made by a currency pair from the time that Tokyo opens for business until London opens. Technically speaking, the Asian session runs a little beyond the time London opens as Tokyo stays open for an hour or so after that.

The most well-known is probably trading the first breakout of the Asian Range , followed by using the highs and lows as key resistance and support, or trading reversals from fake breakouts. I am not convinced these strategies necessarily show reliable edges, but it can be shown that over recent years we can use the Asian Range to give a predictive edge as to what is probably going to happen between the London open and the New York close, just using a simple measure of how the price has changed during the Asian session, rather than looking at the highs and lows as is traditionally the case.

The methodology we can use is quite simple, and I can illustrate that by using the last five years of data regarding two currency pairs: The concept is that at either 8am or 9am London time, we look to see how much the price has changed since midnight London time, which corresponds to the start of the Tokyo session which is the center of Asian Forex business.

Very simply, if the price is up already, there is a higher probability that the price will end the New York session up even further, and vice versa if the price is down. This seems very simple and too good to be true, but it is borne out by the statistics of the previous 5 years. It is not enough to say that the price must be up or down, we need a minimum filter for this move to be significant.

Based on this quote, any good indicator which is reliable so that it can tell you if its ranging or in trend? By observing the range of Asian Session, are you looking at the whole day hourly chart time 8am tokyo to 4pm tokyo time or just only the last closing hours of tokyo?

Price action gives you much more clarity than any other indicator in my opinion when you want to determine such things. Refer to rule 1 up there…. Could you tell us in your own opinion how many pips you will consider too large a range to trade this Asian Break out strategy?

Mail will not be published required. In general, the Asian session is a quiet time to trade. Asian Session Volume — Posted in Forex Trading Strategies. January 12, at January 13, at 4: January 23, at January 23, at 2: January 23, at 5: January 29, at 6: March 12, at 6: March 25, at