Asian Session High Low Breakout Trading System is known as Asian Breakout System. The AHAL (Asian High Asian Low) method has become a well-liked option due to its ease of use and potential for profit. In lieu of a more direct approach, this daily scalping trading strategy does away with conventional trading tools including Fibonacci retracements, trend lines, chart patterns, and oscillators. Custom trading rules can be added to this system through adaptation and modification.
Understanding the AHAL Breakout Strategy
Finding the highest (Asian High) and lowest (Asian Low) price points during the Asian trading session is the cornerstone of the AHAL method. In order to do this, traders use chart lines to identify the extreme price positions between 21:00 GMT and 06:00 GMT, which corresponds to the typical Asian trading session time frame. Traders can definitively determine the Asian High and Low of the day by 6:00 GMT.
The foundation of the breakout trading strategy is the expectation that an asset’s price will move dramatically in either direction, particularly after being constrained by a very small price range. The AHAL approach, which makes use of the High and Low of the Asian session to forecast potential breakouts during later trading sessions, fits perfectly inside this strategy.
Traders can highlight probable breakouts during the European or American trading sessions using the Asian High and Low as reference points. The basic assumption is that once the price of an asset moves above the High or below the Low recorded during the Asian session, major price changes are expected to follow.
Leveraging AHAL for Profitable Trades
The Asian High and Asian Low are often the places where traders using the AHAL approach place their buy and sell orders. This technique is based on the idea that if the price moves outside of the established range, a major trend (either upward or downward) would probably follow.
A sell order below the Asian Low signals a bearish trend, while a buy order above the Asian High signals a bullish trend. This gives traders the chance to profit from significant price changes that might lead to trades that are successful.
All manual work goes into this Asian Breakout System. The indicators generate the signals, but it is up to the trader to decide when to enter the market, create protective stops, and when to quit it profitably. As a result, the trader must be conversant with the concepts of risk and reward and set entries and exits using initial support and resistance levels.
You can use the trade signals provided by the AHAL System as-is or, as is advised, combine them with extra chart research to further filter them. All levels of traders can utilize this strategy, but until you are reliable and self-assured enough to trade on a live account, it can be helpful to practice trading on an MT4 demo account.
Any Forex currency pair as well as other assets including equities, commodities, cryptocurrencies, precious metals, oil, gas, etc. can be traded using the Breakout Trading System. Additionally, you may apply it to any time frame that works best for you, including charts for one minute to one month.
Risk Management in this Breakout Trading System
The AHAL approach has been successful for many traders, however, like any trading strategy, it is not without danger. Setting up stop-loss orders correctly is essential for managing this risk. In this instance, stop-loss orders are normally placed with the purchase order just below the Asian High and the sell order just above the Asian Low. This tactic helps reduce possible losses in the event that the price abruptly turns around following the breakout.
Trading Rules
When implementing this Asian Breakout System, keep in mind to tighten your stop losses around High Impact News Releases or refrain from trading at least 15 minutes before and after these events.
As usual, use wise money management to get the best outcomes. You need to master discipline, emotions, and psychology to be a successful trader. Knowing when to trade and when not to is essential. Trading should be avoided at times and under unfavorable market conditions, such as low volume or volatility, outside of the main sessions, with exotic currency pairs, wider spreads, etc.
Setup for Entry and Exit
- Work best on GBPUSD. It also works on all other pairs, but try it out with different SL and TP.
- Use 55 EMA to spot high-probability trades, thus avoiding entering any positions against the trend. Identify the trend using the EMA on the hourly chart, then switch to M5 TimeFrame to enter either buy at the Asian High or sell order at Asian Low.
- You must adjust trading session times to match your broker server time in the input parameters. Default settings are for GMT 2+. (which is the default on most brokers)
- Dark Gray Box – the Asian session
- Medium Gray Box – the European Session
- Light Gray Box – the America session
Buy Entry
- 55 EMA on the hourly chart is in uptrend mode. (EMA is blue with price above the EMA)
- Place a pending buy order at the Asian High.
- Set the stop-loss 30 pips below the Asian High.
- Set the first targeted profit at 15 pips.
- Set the second target profit at the next mid-pivot price level or the next pivot point.
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- Move the stop-loss to break even after the first target profit is hit.
- Exit the second trade if an M5 candle close lower than the nearest pivot point.
Sell Entry
- 55 EMA on the hourly chart is in downtrend mode. (H1 EMA is red with price below the EMA)
- Place a pending sell order at the Asian low.
- Set the stop-loss 30 pips above the Asian low.
- Set the first targeted profit at 15 pips.
- Set the second target profit at the next mid-pivot price level or the next pivot point.
- Move the stop-loss to break even after the first target profit is hit.
- Exit the second trade if an M5 candle close higher than the nearest pivot point.