Forex Strategy For Asian Session
While we consider the currency market to be a round-the-clock or 24-hour trading hub during week days, trading sessions are reliably broken down into the Tokyo (Asian) session, London (European) and New York (North American) sessions.
To better understand the Forex Strategy For Asian Session, we added the “sessions” custom indicator to give us a vivid representation of these sessions.
By that, the Asian session is represented by the forest green colored area, while the European and North American sessions are both depicted by the purple and dark blue shaded regions.
Of course, there is an overlap between the Asian and European sessions, while the European session stretches into the North American session.
The strategy is designed to take advantage of the sudden spike in price action when the European trading session comes alive.
The flow of liquidity leads to breakout and this is what we expect to profit from.
MetaTrader4 Indicators: sessions.ex4 (Default Setting), Support and Resistance (Barry).ex4 (Default Setting), MACD.ex4 (Colors Width Modified; #0=2, #1=2)
Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minute, 30-Minute
Recommended Trading Sessions: Asian, London
Currency Pairs: EUR/USD, GBP/USD, USD/JPY
Buy Trade Example: EUR/USD (EURO / US Dollar), M30 Chart
Long Entry Rules
Initiate a buy entry if the following indicator or chart pattern gets put display:
- If after the expiration of the Asian session, price opens and closes above the marked horizontal yellow resistance line, created off the red dotted line of the Support and Resistance (Barry) custom indicator (see Fig. 1.0), price is said to be driven to the upside, thus a signal to go long on the currency pair of interest.
- If the silver histograms of the MACD Metatrader 4 indicator breaks and hovers above the zero horizontal reference level as seen on Fig. 1.0, the general market sentiment is said to be bullish, thus a trigger to buy the selected forex pair.
Stop Loss for Buy Entry: Place stop loss below Asian session low support.
Exit Strategy/Take Profit for Buy Entry
Exit or take profit if the following rules or conditions takes precedence:
- If while a bullish trend is ongoing, price breaks below the dotted blue support level of the Support and Resistance (Barry) custom indicator, bulls power is said to be diminishing, therefore an exit or take profit stance is apt. In the absence of this trigger, positions should be allowed to run until the close of the U.S. session as shown on Fig. 1.0.
- If the MACD indicator pops up a silver histogram below the zero reference level, price is said to be making a probable bearish reversal, thus an exit or take profit stance is recommended.
Sell Entry Rules
Enter a sell order if the following holds true:
- If after the expiration of the Asian session, price opens and closes below the marked horizontal yellow support level that is generated from the dotted blue line of the Support and Resistance (Barry) custom indicator as illustrated on Fig. 1.1, price is said to be dragged lower, thus a signal to go short on the currency pair of focus.
- If the silver histograms of the MACD indicator breaks and hovers below the 0.00 signal level as depicted on Fig. 1.1, the overall market sentiment is said to be bearish, therefore a sell alert will suffice.
Stop Loss for Sell Entry: Place stop loss above Asian session high resistance.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit if the following takes center stage:
- If while a bullish trend is ongoing, price breaks above the dotted red resistance level of the Support and Resistance (Barry) custom indicator, bears power is said to be weaning, therefore an exit or take profit stance is recommended. In the absence of this trigger, orders should be left open until the close of the U.S. session as exemplified on Fig. 1.1.
- If the MACD indicator readjust to display a silver histogram above the zero reference level during a bearish trend, price is said to be making a likely bullish reversal, thus an exit or take profit stance is advised.
Sell Trade Example: EUR/USD (EURO / US Dollar), M30 Chart
About The Forex Technical Indicators Used
The sessions custom indicator is a technical tool that allows traders see the various market sessions using a colored visual representation on the chart window.
The Support and Resistance (Barry) is a technical tool that draws support (blue dotted horizontal line) and resistance (red dotted horizontal line) levels on the activity chart.
Designed by Gerald Appel in 1979, the MACD or Mac D, as it is fondly called is a simple multipurpose tool deployed in identifying and following strong trends, while also catching trend reversals.
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