About Strategy
Tokyo and Sydney sessions are not very popular due to low volatility. However, this is not a reason to give up profits even during this period. Scalping strategy for the Asian session is a variety of the Master-Candle pattern developed especially for low volatility.
The Master-Candle pattern consists of a large bar and a minimum of four subsequent candlesticks formed within the range of the main bar. In more volatile sessions, the Master-candle strategy implies breakout trading. During the Asian session, a lack of significant momentum makes this strategy useless. Scalping for the Asian session works in the opposite direction from the breakouts and can bring profits even during low volatility.
Please note that the risk-to-reward ratio on this strategy is 1:1. To get a profit, the number of profitable trades should exceed 50%, considering the coverage of the trading costs.
Main Details
If you are ready to make some money during the Asian session, let's move on to the strategy itself:
1. Currency Pairs
Higher volatility will do more harm to you if you use this strategy. Therefore, choose trading instruments that do not include Asian currencies. Majors without the Australian dollar and the Japanese yen will work just perfectly:
- EUR/USD
- USD/CAD
- GBP/USD
2. Timeframe
For this strategy, you will be using two different charts:
- 1-hour chart. On this timeframe, you will search for the Master-candle pattern and build the required price levels. Once you find the pattern, draw the lines at the highs and lows of the master candlestick. These levels will become your support and resistance. To draw the lines, you can use the trend line tool.
- 15-minute chart. This timeframe is used for trading itself. Wait until the price reaches one of the built levels and get ready to open a trade.
3. Entry Point
Search for a candlestick that has broken through the built support or resistance level and passed at least 5 points. This bar will become your main signal:
- If the candle breaks the resistance level, set a buy order;
- If the new bar crosses the support line, open a sell trade.
In this strategy, orders might be opened in both directions, even if the trade goes against the trend.
4. Exit Point
The Stop Loss and Take Profit levels are set the same distance from the entry point. That is why the risk-to-reward ratio is 1:1. The distance to the exit points should be equal to the height of the master-candle.
And that's all you need to know about Scalping in the Asian session strategy. The main advantage of this system is its simplicity while it still can bring you profit even during low volatility. Make sure to try it during the next Asian session.