The Asian trading session, also called the Tokyo session, starts at 12:00AM GMT and is usually considered to run between 11 p.m. and 8 a.m. GMT. Trading the Asian breakout can prove to be profitable.

Just like the other forex trading sessions, breakouts also happen during the Asian session—although the trade volume is not as high as during the London or the New York session.

Nonetheless, you may find a large momentum, especially during major market announcements, and make some good pips during the session.

More so, you can also get opportunities to convert your Asian breakout trades to really large ones and bank the profits well into the other trading sessions.

Example 1

If price of a currency pair is tightly ranging before the Asian session starts, you need to start by marking the top and the low of the range.

Just before the start of Asian session, put a buy stop before the range high and a sell stop below the range low.

After the session starts, you may experience quick price movements just like the start of other trading sessions.

If one of your stop-pending orders is triggered by the market, then immediately deactivate the other one. Got this trade Asian breakout idea?

On the above USD/JPY hourly chart, we started by marking the range high and range low before the session began. Thereafter, we placed a buy stop above the range high and a sell stop below the range low.

When price triggered the buy stop order, we immediately deleted the pending sell stop order. This breakout was successful as price moved more than 100 pips in a row. Wow!

For buy stop trades, it’s better to place your stop loss levels below the range low. On the other hand, for sell stop trades, it’s better to place your stop loss levels above the range high.

As both volume and volatility of Asian session are comparatively lower than London or New York session, your primary target should be to achieve at least 1:1 risk to reward ratio.

At times, your trade may offer better R:R but it depends on your patience of holding the current position and effectively managing your trade.

Example 2:

The above chart is just an extension of our previous example illustrating the benefit of holding an Asian breakout position until it hits the daily resistance level.

According to the Asian breakout trading rule, your stop loss should be below the range low, which is about 50 pips on the above chart.

If you held the above trade, your profit could be more than 400 pips with a risk to reward ratio of 1:8! Such profit from one single intra-day trade can ease your trading pressure for the whole week!

Some of the best currency pairs to trade during the Asian trading sessions are AUD/JPY, USD/JPY, and AUD/USD.

Fundamental news and major events affecting those currencies are normally released during the Asian session.

Therefore, you may watch those currencies for potential breakouts because they are traded with higher volumes than the other currencies.

Conclusion

The Asian breakout strategy could be unquestionably a good start of your trading day and may ease you from the pain of whole day trading and endlessly watching the charts.

Importantly, you should not utilize a trading strategy blindly. Choppy or sidelines market conditions may fail to generate successful Asian breakouts and lead to false breakouts and increased losses.

Therefore, you should place your stop orders appropriately according to the market trend direction and add support or resistance levels for better confirmation of your decisions.

Ultimately, the Asian breakout strategy is very simple to understand and traders should use it to maximize their profits for any trading day.

Have you used the Asian breakout strategy for trading currencies online? Please share your thoughts and experiences in the comment section below.

Happy trading out there!