Scalping The Asian High And Asian Low

[goldevil1988]

I am a newbie .

there should be a sell off or downtrend after the USA market closes . ( sometimes )

y nt put a trigger point and scalp .

any idea how to put the trigger point .

my frenz told me he uses a 25 pips range above and below when the us market closes .

so if the price shot up he can scalp .

[BenU]

I haven't back tested, forward tested, demo traded, much less live traded this system yet. I've only just researched the several forums that have discussed it considerably, and which are listed below.

None of the content that I post here is original. It's just my consolidation of the more important notes I've taken. A lot of credit should go to the frequent poster, fxoperator, though this system seems to pre-date even him.

I'm sharing this with all of you in the hopes of saving you some time.

This strategy is well discussed at the following links:


Forex Education, Forex Training, Currency Trading, Beginner's Guide to Forex Trading, Learn Forex, Foreign Exchange - BabyPips.com


The above threads contain back test, forward test, and live trade results. Depending on your trading platform, they also contain useful resources (e.g. expert advisors for indicators and automated trading, etc.).

This is essentially a breakout trading strategy designed to consistently collect an average 10 – 15 pips per day at or near the London session open.

Most people use this strategy with GBP/USD. The rest of this description applies mostly to that pair. However, some people have successfully back tested, forward tested, and live traded with other pairs. Their rules (e.g. entry times, entry parameters, stop loss, take profit, etc.) are typically somewhat different for those pairs. Some have even claimed success with all twelve pairs. GBP/JPY and GBP/CHF seem to attract particular interest.

In short, every day between 0500 and 0600 GMT you place two orders to trap breakouts above and below the previous Asian session’s high and low prices.

The order entry time is meant to be late enough to have allowed the Asian session’s high and low prices to have formed, and early enough to precede the increased price action that occurs before and after the London session’s open. Some people ignore BST (British Standard Time, GMT+1, in effect from 0100 GMT on the last Sunday of March through 0100 GMT on the last Sunday of October every year), and they place their orders between 0500 and 0600 GMT throughout the year.

The Asian session’s high and low prices are calculated between 2100 GMT of the previous day and the order entry time.

A buy order is entered at the Asian session’s high price, and a sell order is entered at the Asian session’s low price. Some people have found they can avoid more fake outs by entering their orders some small number of pips (~5) above and below the Asian session’s high and low prices. Orders are end of day orders.

Stop loss and take profit depend more on your money management strategy. Many people will place their stop losses at 30 pips, or the opposite side of the Asian session’s range, whichever is less. That latter prevents you from opening two positions against each other, both of which might linger without hitting their stop losses or take profits in a ranging market.

Many people will set their first take profit (TP1) to their spread/commission plus 15 pips. If they trigger TP1, many people will close out a portion of their position, move their stop loss to break even (BE), and let their remaining position run. They may repeat this for several incremental take profits. They may let their remaining position run until they identify an exit signal.

For example, one person’s money management method set take profit levels at 10, 20, 30, and 40 pips. They would close out 25% of their position at each level. Also, when they were 7 pips in profit, they would move their stop loss to 1 pip profit, and when they were 15 pips in profit, they would move their stop loss to 5 pips profit.

If an order is triggered, and then that position is stopped out, some people will let the opposite order stand to try to catch a breakout in that direction. If an order is triggered, and then a take profit is triggered, some people will cancel the opposite order (this seems to be reinforced by better research), while others will still let the opposite order stand to try to catch a breakout in that direction.

Most people will only place the two opposite orders and then let them play themselves out. Some people will continue to place new orders at the same entry points throughout the rest of the day.

The difference between the Asian session’s high and low prices, the range, seems to have become a filter for many users of this system. Many users will not trade this system if the previous sessions range is less than 20 pips or greater than 60 pips. This system will sometimes work regardless. It’s probably more important to avoid this system as the Asian session’s range approaches the traded pairs Average Daily Range (ADR). The closer the Asian session’s range to the ADR, the more likely you are to be stopped out of your positions.

The market price relative to the Asian session’s high and low also seems to be a filter for some users of this system. They will only trade this system if the market price at order entry time is in the middle of the Asian session’s range, or 25% less than the high or greater than the low.

People will also avoid trading this system when there are holidays, and in some cases, news.

Some people will also avoid trading this system on Friday (and weekends, of course). Many of those people avoid trading any system on Friday. This system seems less impacted by Monday.

Alternate Methods

Some people will only trade the second break out in the opposite direction. For example, before placing an order, they wait to see which order would be triggered first, the buy or the sell order. Then, they only place the opposite order. This method seems to be reinforced by better research.

This person has some excellent insights into trading breakouts in general that could be useful for an alternate method of trading this system: