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Profit from the New York Session Breakout Trading Strategy

If you're still searching for the right trading system, consider implementing a breakout strategy, especially if you often trade during the New York session. Breakout strategy in trading is a common practice among experienced traders, where they enter the market when price breaks out. One of the moments when breakouts often occur is when the New York trading session opens until the London trading session closes. Why do breakouts occur during this moment? And how can you profit from this situation?

Insights into the New York Session 

There are three major trading sessions in the global forex market: London, New York, and Tokyo. The New York session is the most liquid among all other market sessions, especially due to its overlap with the London session. Between 08:00 to 12:00 EST, both sessions open simultaneously, creating high levels of price volatility and allowing for breakouts. London and New York are the largest forex market sessions in the world, with London handling 34% of daily market trades and New York handling 16%.

New York Session Breakout Trading Strategy 

Before implementing the New York session breakout trading strategy, there are several factors to consider. Apart from determining entry or exit times, the choice of currency pairs is crucial. Select pairs that show a strong uptrend tendency, such as EUR/USD, GBP/USD, USD/CHF, and USD/JPY.

Rules of New York Session Breakout 

Trading Here are the rules to follow:

  1. Open a chart with a 15-minute time frame.
  2. Draw vertical lines at 07:00 EST and 09:00 EST.
  3. Draw horizontal lines at the top and bottom of the candles between the two vertical lines, forming an identification range box.
  4. Place buy stop pending orders above the highest point and sell stop pending orders below the lowest point.
  5. Set stop loss at the opposite point of the order and target profits at 50 to 60 pips.

Pros and Cons of New York Session Breakout Trading 

The advantage of this strategy is the ease of achieving profits by utilizing the high volatility levels during the London and New York overlap sessions. Additionally, this strategy can prevent overtrading because there is only one trading setup per day. However, the disadvantage is when the high and low distances exceed 60 pips, transactions can become unprofitable as the price has moved too far.

Trading the New York session breakout only applies if the breakout actually occurs. If not, traders need to cancel all pending orders and wait for the next New York trading session. Also, pay attention to USD news releases at the same time, and remember that breakouts usually only occur when the New York and London sessions overlap. Afterward, price volatility tends to stabilize.

By following the rules and important notes above, you can try the New York session breakout trading strategy to maximize your profits. Always conduct testing and evaluation before implementing a new strategy in your trading.


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