Are you looking to enhance your trading skills with a reliable strategy? The ICT Asian Range Trading Strategy might be just what you need. This guide will explain the strategy in simple terms, helping both new and experienced traders understand and apply it effectively.
What is the ICT Asian Range?
The ICT Asian Range refers to the price range during the Asian trading session, which starts at 7:00 PM and ends at midnight New York time. Traders use this range to predict how the market might move after the Asian session closes. By analyzing the highs and lows during this period, you can anticipate potential price movements in the following sessions.
A tight price movement within the Asian Range often signals that a significant price shift is on the horizon. This usually involves the market moving above or below the range to “sweep out” liquidity. This liquidity sweep can trap traders who are on the wrong side of the market, leading to a reversal in price direction.
Trading the Asian Range in a Bullish Market
If you believe the market is going to rise, here’s how you can use the Asian Range to your advantage. First, confirm that the overall market trend is bullish. Then, mark the high and low points of the Asian Range on your chart and extend these lines.
In a bullish market, the price may drop below the low of the Asian Range to sweep liquidity and trap sellers. Once the price moves below this low, you can look for buying opportunities. You might decide to:
- Buy below the midnight open price, but only after the Asian Range low has been taken out.
- Wait for the price to reverse and move above the high of the Asian Range, confirming the upward trend.
- If you missed these chances, wait for the price to reach the high of the Asian Range during the New York open.
In any case, consider setting your stop-loss 10 to 20 pips below the recent low after the market shifts in your favor. Aim for a profit target at the next significant resistance level where liquidity is likely to be collected.
Trading the Asian Range in a Bearish Market
If you expect the market to fall, you can apply a similar approach. First, ensure that your market analysis indicates a bearish trend. Mark the high and low of the Asian Range on your chart and extend these lines.
In a bearish market, the price may rise above the high of the Asian Range to sweep liquidity and trap buyers. Once the price moves above this high, you can look for selling opportunities. You might decide to:
- Sell above the midnight open price, but only after the Asian Range high has been taken out.
- Wait for the price to reverse and move below the low of the Asian Range, confirming the downward trend.
- If you missed these opportunities, wait for the price to reach the low of the Asian Range during the New York open.
Again, set your stop-loss 10 to 20 pips above the recent high after the market shifts. Your profit target can be the next significant support level where the price might find liquidity.
By mastering the ICT Asian Range Trading Strategy, you can improve your ability to anticipate market movements and make more informed trading decisions. Remember to always confirm your market bias, be patient for the right setup, and manage your risk carefully.
Frequently Asked Questions (FAQs)
The liquidity sweep is important because it helps you avoid false breakouts. When the market moves above resistance or below support to collect stop-loss orders, it often reverses direction afterward. By waiting for this sweep, you can enter the market at a better price and increase your chances of a successful trade.
Yes, you can apply this strategy to any currency pair. However, it works best with major currency pairs that are actively traded during the Asian session, such as USD/JPY or AUD/USD. These pairs tend to have more predictable movements during this time.
The time frame is crucial because the strategy relies on the specific hours of the Asian trading session. Using the correct time frame ensures you’re analyzing the right data. It’s also helpful to check higher time frames, like the 4-hour or daily charts, to confirm the overall market trend.
Waiting for the price to break the Asian Range is recommended because it confirms the market’s direction after the liquidity sweep. Entering a trade after this break reduces the risk of getting caught in a false move and increases the likelihood of a successful outcome.
Effective risk management involves setting appropriate stop-loss orders and profit targets. You can set your stop-loss 10 to 20 pips away from your entry point, depending on market conditions. It’s also important to plan your trades carefully and avoid risking more than you can afford to lose on any single trade.