Maximizing Profit with Breakout Trading Strategy during the New York Session

If you're seeking a suitable trading system, why not consider a breakout strategy, especially if you're actively trading during the New York session? The breakout strategy is one approach frequently utilized by experienced traders, wherein they enter the market when there's significant price movement. One of the moments that often experiences breakouts is when the New York trading session opens until the London trading session closes. Why do breakouts frequently occur during this time? And how can you profit from these moments?

The New York Trading Session

There are three major trading sessions in the forex market: the London session, the New York session, and the Tokyo session. The New York session is the most liquid among all market sessions, particularly due to its overlap with the London session. The New York trading session lasts from 8:00 am EST to 5:00 pm EST. During these hours, there's an overlap between the London and New York sessions, creating high volatility that often results in breakouts. London and New York are the largest forex trading centers in the world, each handling a significant portion of daily volume.

Pros and Cons of Trading Breakouts during the New York Session

Breakout trading strategy during the New York session is highly beneficial for traders with limited time for trading. They can easily identify breakout trends and make informed trading decisions. The time between 8:00 am and 12:00 pm EST is an ideal time to monitor breakouts before bedtime and evaluate the outcomes in the morning. Additionally, this strategy can help prevent overtrading because traders only have one trading setup per day.

However, like all trading strategies, breakouts also have their drawbacks. If the distance between the high and low exceeds 60 pips, trading can become unprofitable because the price has already moved too far and lost momentum. In such situations, it's better to reduce the profit target to 20 to 30 pips instead of 50 pips. Furthermore, if a breakout doesn't occur, the market may move within a range, and traders need to cancel all pending orders and wait for other trading opportunities.

Breakout trading during the New York session works well when breakouts actually occur. If there's no breakout, it means the market is in a ranging condition. Traders should wait until the next New York session or explore other trading strategies. It's important to note that there are only 9 candlesticks (with a 15-minute timeframe) between 7:00 am and 9:00 am EST, and USD news releases also often occur at the same time. Additionally, breakouts typically only occur during the overlap between the New York and London sessions. After that, prices tend to stabilize, and traders can consider other trading strategies.

By understanding the breakout trading strategy during the New York session, you can increase your trading success. Always remember to follow the rules and observe market conditions before making trading decisions.

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