Speaker A
Here's how I trade the 6 p.m. market open and the Asian session. If you've been trading using candle patterns or ICT or even something else, I want you to try using these fair prices as targets in your back test and see how that helps you.
JJ Simon explains trading the 6 p.m. and 8 p.m. Asian sessions using fair price theory for continuation and reversal trades on funded accounts.
Key Takeaways
- The 6 p.m. open price serves as a reliable fair price level for trading continuation and reversals.
- Trading both continuation and reversal trades in the 6 p.m. and Asian sessions can increase daily trade opportunities.
- Breaks of market structure are key entry signals for these trades.
- News events must be monitored as they can cause moves that invalidate fair price levels.
- Backtesting fair price targets with existing strategies can improve trade accuracy.
What the video covers
- JJ Simon demonstrates trading strategies for the 6 p.m. market open and the Asian session at 8 p.m. using fair price theory.
- He emphasizes using the 6 p.m. open price as a fair price target for continuation and reversal trades.
- Each session involves one continuation trade and one reversal trade, allowing for about four trades per day.
- Trades are entered based on breaks of market structure and price action around the 6 p.m. and Asian session opens.
- The strategy includes marking the opening price with horizontal rays and identifying gaps to trade towards or fill.
- JJ reviews multiple days of examples showing how fair prices act as support/resistance and targets for trades.
- He notes the importance of monitoring news events as they can significantly impact fair price validity.
- Asian session trades often revert back to the 6 p.m. open price unless the Asian open is far from it.
- The Sunday 6 p.m. open is considered especially fair due to longer weekend pricing time.
- Backtesting this approach with candle patterns or ICT methods is recommended before live trading.
Chapters
- 00:00Introduction to 6 p.m. and Asian session trading
- 00:41Marking the 6 p.m. open and continuation trade setup
- 01:18Asian session open and continuation/reversal approach
- 02:00Examples of continuation and reversal trades on Wednesday
- 02:41Managing stops and additional entries in Asian session
- 03:34Trading Tuesday’s 6 p.m. open and Asian session
- 04:11Monday session continuation and reversion trades
- 05:02Sunday session fair price and gap fill trades
- 06:11Summary and final examples of the strategy
Full Transcript — Download SRT & Markdown
Speaker A
Fair price is the 6 p.m. open whenever it reopens for the day. Just because the futures were closed for an hour, which means there's an hour for them to be priced at a good price. If you haven't seen my strategy video in
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general, I recommend checking that out. It's on my YouTube. But each session, I will trade one continuation and one reversal. So, I'm going to talk about how to do continuation and reversal for 6 p.m. and then continuation and
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reversal for Asian session. This allows me to take four extra trades per day. I'll go through about two weeks' worth of trades and show you how these fair prices were treated. So, we're going to start on May 14th. We have the 6 p.m.
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open right here. You can mark out the opening price using the horizontal ray. There is no gap on this day. So, if you were to take a continuation, you would just take it in the direction of the opening candle.
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After that, I would trade a reversion back to the 6 p.m. price. My usual entry criteria is off of break of structure.
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Something like this. I still believe that this red line, which is marking the 6 p.m. open, is a fair price. There's lots of consolidation here and then a move up. So, I could take another short position probably here off the next
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break of structure that I see back in the direction of the 6 p.m. open.
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From there, Asian session opens at 8:00 p.m. Asian session opens fairly most of the time, unless it's very far away from the 6 p.m., then I'll trade back to the 6 p.m. So, for the Asian session, I'll take an opening continuation to the 6
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p.m. or to a gap if it has not been filled. In this case, there is no gap or the gap has been filled. And the Asian open is already opening at the 6 p.m.
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price pretty much. So, I wouldn't take any continuation trades for Asian because it's opening at what I think is a fair price. I would still do a reversion to the Asian open. There's a very large move up here and I would just
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trade a reversion back to the Asian fair price off a break of structure. So that's how I get about four trades in for the evening. Now I'll just go over a bunch more examples and you can do so as
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well. Wednesday it opens and the gap is filled. There is no real opportunity for a continuation trade short, but there is one for long because it breaks this structure to the upside and closes significantly above. You could take
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reversion back to this price here entering off a break of structure. This one would not have won, but I still think it is a very strong trade to take.
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So, we're done with continuation. We're done with reversion. Now, Asian session opens right here. And Asian session opens very far away from the 6 p.m. price.
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So, Asian continuation would be in the direction of 6 p.m. price. Just enter off the first break of structure and you get a great trade for 29 points. If you let it go for more, unfortunately, you would have lost this one. After getting
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stopped out, you could look for another entry in the Asian session. Just waiting for another break of structure to the downside. And the first one that I see happens to be right here, targeting the 6 p.m. open, which is most
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likely still a fair price. Then you will hit 135 points or so. All right, now we're back to Tuesday. Market opens here at 6 p.m. to take a nice continuation trade here. Just waiting until the wicks are dying down so you have confirmation
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that the uptrend is correct. After continuation trade, you can start to look for a reversion off of a break of structure.
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Come back to the 6 p.m. price. So there's the continuation. There's the reversion as always. Now Asian session opens pretty far below the 6 p.m. price. So Asian continuation would be longs in terms of the entry. This first candle is very
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very large, but it doesn't close above this structure. So I'm not too excited to take that. I would probably wait until somewhere within this move up where I'm getting it significantly above previous structure even up here. But at
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this point, you're not getting too many points in your favor. So, I guess it's up to you where you enter along this.
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Unfortunately, there's this very large wick here. So, might have gotten stopped down, but it's just good to see that Asian did continue back to the 6 p.m.
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price as expected and then it moves farther up. I'm usually done trading at about 9:30, but if you're still trading, you could try to look for some sort of short from here back towards the Asian session. Unfortunately, this was just a
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very long biased evening. Monday session opens at 6 p.m. right here. Very large green candle. Could look for some sort of continuation as usual. And then for reversion, whenever you get take profit on continuation or whenever you see a
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break of structure, the first break of structure occurs right here. There's no structure being formed here that is broken. Structure is forming here and it's broken here. You could just take a reversion back to the 6 p.m. price. Asian
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session also opens right here and you could take this continuation down here back towards 6 p.m. price if you weren't able to catch this for any reason.
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After this dump here, I would trade a long reversal because this is sort of the Asian continuation short. I would take a long trade off of the first structure that I see back to either the 6 p.m. price or pre-Asian price here. It
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drops off farther and you could take one final trade, possibly another long back towards 6 p.m. price off of a break of structure, which seems you're getting about here.
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So depending on your take profit, stop loss, maybe you win, maybe you don't. You also have to be very careful of news to see if news is causing moves like this. News is pretty much the only thing that impacts fair price. So you have to
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have Forex Factory open on one monitor and determining is this move fair or not.
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Sunday we do the same thing. So start by marking out the open and then our continuation trade is slightly biased to fill the gap. So I wouldn't be too interested in continuation shorts even though it looks like they did win. I
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would just be taking longs off of either this break of structure which is giving 24 points or this break up structure which is giving 46 points. You can also send a very long trade in to fill the entire gap with lower risk and target
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just the open with higher risk. After it fills the gap, I'm waiting for it to come back to the 6 p.m. open price. Enter off of the first break structure. You see no structure is broken here. There is the structure.
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There's the break and you're getting 25 points. Next Asian session opens right here. Asian session opens at the exact pretty much the exact same price that the 6 p.m. opened was opened at which means this area right here in between these
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two lines is the most fair price ever. So this move up here is incredibly unfair.
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You can enter short off of break of structure here back to this price. Unfortunately, this one loses. So you just wait for the next break of the structure.
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There is structure here but this does not break it. So I would not validate that and enter here. I would wait until structure is confirmed to be broken which seems like right here of this structure and this structure or even
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right here of this structure. You're not getting as many points but this is pretty much guaranteed to win. I would look more at entering right here. So you're getting about 50 points in your favor. It's a really good 6 p.m. session
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treating the opening price as fair. On Sunday, they have 48 hours pretty much over the weekend to price in the open.
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So, these 6 p.m. opens on Sundays are usually a lot more fair than the normal 6 p.m. opens because they only have an hour to price those in. Now, I've got one more week worth of examples. Let's just look at that pretty quick. Here we
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have an open, no continuation.
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structure here, but it's kind of invalidated. And then a new structure is formed here, which we break through, [laughter] which we break through this candle down here. Entering at the very bottom of the candle isn't the worst, but it's not the
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best. If you're somehow able to enter somewhere through the candle, if you have other confluences, then that would be great.
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Just in general, trading back to the 6 p.m. open price is great. And then Asian session opens right here.
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continuation. It does go up long, so I wouldn't consider taking a continuation. Most likely, the high time frame bias would be long to fill this move down here, but I would think the 6 p.m. open is pretty fair. So, I wouldn't want to
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take continuations of the Asian session going long. For the reversion, I would just wait and look for the first break of structure.
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We get structure here and it's broken here. So, I would take this position back to the pre-Aian price.
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All right, now we're on Wednesday. We have the market opening 6 PM right here.
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Some sort of continuation possibly to fill the gap. There's not the best entry since there's a very large wick on top and then this one pretty much already fills the gap in one candle. So, not the best entry. You would have to have a
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very weird risk-to-reward if you want to approach this trade. You could also wait till it comes all the way down here below 6 p.m. Still hasn't filled this bit of the gap. And then just enter long off break of structure. a very late
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continuation, but it works. Market pretty much does nothing until it finally decides to fill the gap. So, if you were holding long, then uh for the Asian open at 8:00 p.m., you'd have had this very large green candle. So, um
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this is a very good opportunity to take continuation longs with the Asian open if you did not catch the first one.
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Asian open price is about here, pretty close to the 6 p.m. price. Just proving that that is fair. this move down or be unfair. If you want to trade back to these two prices or the gap fill, that
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would be a very good trade to take as well. You're [clears throat] getting a discount on the long because you're below the fair price if the fair price is between these two opens.
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This move up fills the gap and then we can start looking for shorts back to the Asian price. Just enter off the first break structure you see and there you go.
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This is a bit of a weird session with very large wicks pretty much everywhere, but it is good to see that gap was filled and then it came back to the Asian price. All right, Tuesday we have the market opening right here. I
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wouldn't take continuation longs. I would want it to come back to the pre gap price as well just for a high time frame reversion. And then Trump does tweet here which messes with the fair price. Asian does open right here. So,
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if you're looking to take a reversion back to the 6pm price, then your entry would be pretty much right here off the break of this structure. And it's a breakout above this zone of consolidation. And you're getting 80
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points back to the 6 p.m. price, which is always great. So, this is probably the only trade for that strategy. I have another news risk strategy where I would be taking longs down here back up to the consolidation after the Trump tweet.
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All right, two days left. Monday, we have the market opening here. Continuation longs aren't the best since there's two extremely large wicks on top and the gap fill is down here. So, I'd be looking for shorts as soon as it
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starts consolidating and breaks down just to fill the gap. After that, Asian session opens right here. Seems to be a pretty fair price in this area. This move up would be unfair, but not too but not too far. you're able to get 15 or 28
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points in your favor trading back to this area here, which is great continuation for Asian. Um, if you wanted to take that, it would have to be a long position because Asian opened and went up. One last day we have Sunday.
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There is a gap below the chart is just not showing it for some reason. If you were to take continuations, you would want to take shorts off the break of this structure just because the gap was below.
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After that, we would want it to come back to the 6 p.m. open price. Enter off a break of structure would be right here.
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This one does lose and then there's a lot of consolidation and then the Asian session opens right here. So after the Asian session opens, I would trade back to the 6 PM price again as a continuation of the Asian. So that's how
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I trade the 6 p.m. and the 800 p.m. session. Asian open is 8:00 p.m. So I do a continuation, a reversion for 6 p.m.
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and I do a continuation and reversion for the Asian session. So it allows me to get in four extra trades. Remember, Asian trades in the direction of the 6 p.m. open most of the time. 6 p.m.
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trades in the direction of the gap and then back to the 6 p.m. price. So the 6 p.m. price is a very good indicator of the fair price for the evening. Now, before you replicate this strategy, just try back testing and using these as
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targets and seeing if you're able to create a strategy that effectively is generating expected value, trading in the direction of the 6 p.m. open price because that is what I believe to be the fair price for futures.
Topics:6 p.m. market openAsian session tradingfair price theorycontinuation tradesreversal tradesbreak of structurefunded accountstrading strategyprice actionJJ Simon
