Asian session ranges: tight does not mean easy

[Fairman]

Asian session ranges: tight does not mean easy

The Asian session gets labeled as calm and therefore good for scalping. Ranges are indeed smaller on many pairs, but the key is the ratio of range to cost. A 25 pip daily range on EUR/GBP with a 1 pip spread leaves little room for a scalper, because the spread consumes a bigger fraction of every swing.

Liquidity is also thinner, so fills slip more often and stops get triggered by small nudges. The price action often looks like clean oscillation on a chart, yet entries near the edges of that oscillation face a wider spread and worse fill quality than the chart implies.

What works in Asia depends on the pair. JPY and AUD pairs have natural activity because of local participants and data releases. Euro crosses mostly drift until Europe wakes up.

Evaluate each pair by dividing average range over a rolling hour by average spread. If the ratio is under about 15, the pair is probably a poor candidate regardless of how neat the chart looks.

Which pairs really pay off for you in the Asian window, and what ratio do they show?

[Fairman]

Ran the range to spread ratio for my broker between 01:00 and 06:00 London. USD/JPY came out around 20, AUD/USD around 17, EUR/USD around 13, EUR/GBP around 8. That matched my experience: USD/JPY and AUD/USD are fine in Asia, EUR/USD is marginal, and the euro crosses are mostly not worth it. AUD/JPY was surprisingly decent too, maybe 15, because of local participation on both sides. These numbers are from one broker over a few months, so others will see different values, but the ranking between pairs was fairly consistent each month I checked.

[Amanhasnoname]

I ran the range to spread ratio for my own broker last spring and it changed which pairs I look at at night. Between 1am and 6am London time, I measured the average one hour range and divided it by the average spread for a 60 day period. USDJPY gave me about 22, AUDJPY around 16, NZDUSD around 14, and EURGBP only 7 or so. My profit per trade followed the same order almost exactly.

I also found that the ratio changes during the session. In the first hour after Tokyo opens, AUDUSD sat near 19, but between 4am and 6am it fell to nearly 10 as the liquidity thinned out, so I stopped trading it in that last stretch.

Now my rule is simple: I only take Asian trades on pairs with a ratio above 15 in that specific hour, and I recompute the numbers every month because the broker's spread behaviour does shift with the season.