This strategy will solely be traded on the USD/JPY pair since these currencies sometimes go in different directions especially during times of shifting global market sentiment.
We will be using a simple strategy today that works on strong breakout days, specifically for the USD/JPY currency pair.
Let's discuss first the uniqueness and value of the Tokyo market, as well as the Yen, in order to better understand how this strategy works on certain days.
The Tokyo market is unique because of its size and location. This uniqueness gives traders the chance to ride its waves. Tokyo is the first major market to open. Although the Tokyo market opens first, the Aussie markets are not as significant.
The blue box in the above picture represents a Tokyo session during a breakout. You can see how the price rose steadily throughout the day, and then retraced with just one bearish 1-hour candle.
How do you trade with Yen Breakout Forex Trading Strategies?
- Wait until the end of the Tokyo session's first hour candle.
- Place pending Stop Entry Orders just a few pips higher than the high or low candle after the candle has been lit. Our setup will be determined by which stop order is activated first.
- You can cancel the other pending Stop Entry order as soon as you trigger one Stop Entry order.
- Buy Setup: The initial stop loss will be the same as the Sell Stop Entry Order.
- Sell Setup: The initial stop loss will be the same as the Buy Stop Entry Order.
Exit: Following Stop
- Buy Setup: Follow the Stop Loss just a few pips lower than the last candle close to ensure that the trade is stopped in profit.
- Sell Setup: Follow the Stop Loss a few pip above the last candle close, until the trade is stopped in profit.
- Close the trade if it is still open at the end of the Tokyo session.
NOTE: If the candle after the first hour doesn’t break out of the first-hour box, cancel all pending orders.
Want to trade with Yen Breakout Trading Strategy with a regulated broker? Open a live account with AtoZ Markets approved forex brokers:
How to download and install an indicator?
In order to install the indicator on your MT4 platform, you need to follow these steps:
- Click on “Download Indicator” button located at the bottom of the post.
- Save the file to your computer.
- Extract and move the files into MT4>Indicator folder of the MetaTrader4 software file directory.
- Restart your Metatrader platform.
- Navigate to “Indicators.”
- And select “Yen Breakout Forex Trading Strategy” template to apply it on the chart.
Note: This indicator was developed by T. Morris. AtoZ Markets does not carry any copyrights over this trading tool.
Should you trade using Yen Breakout Trading Strategy on your own at all?
Before you start trading with this indicator, you'll want to read this.
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