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Forex traders are well aware of the opening hours of the Asian trading session. Its beginning occurs at 00:00 GMT time. During this period, the trading floors of Hong Kong, Tokyo, and Singapore are activated, and before that, Australia starts to work.
Therefore, currencies such as the Japanese yen, Australian dollar, Singaporean, and Hong Kong dollars dominate the market. The activity of major currencies at this time of day is declining, because at night most of the speculators in Europe and America do not trade.
During this period, the price of major currencies moves in a narrow corridor called the night flat. It has long been noted that the boundaries of this range represent fairly strong levels of support and resistance.
Their breakdown entails a significant change in price extremes. Therefore, the tools for fixing such changes help to earn a very good profit.
One such technical tool is the Breakout indicator. It helps speculators identify night flat zones for their further effective use. A tool has been developed for the MetaTrader 4 trading platform. The Breakout indicator is applicable for any asset and at all time intervals.
Indicator settings
When setting the Breakout range detection indicator, it is very important to choose its operation parameters correctly. The quality of trading depends on this in the future. The following input parameters can be changed in the tool settings:
Number_Of_Days - the number of days visually displayed on the screen;
Period_Begin - time reference point of the main corridor (on the chart, it looks like a red frame). Given the start of the Australian session, this parameter defaults to 00:00;
Period_End - time to end this range. By default, this is the end time of the Asian session, so the parameter value is 05:30;
Box_End - time to complete the common corridor, indicated in blue on the chart. The default value coincides with the end time of the American trading session and is equal to 23:00;
Box_BreakOut_Offset is the designation of the distance from local extremums. On the terminal screen, these are green stripes at the borders of the ranges. To avoid noise when volatile actives trading, the parameter value should be set to 20.
Indicator signals
This trading tool shows the trader the boundaries of time and price ranges. Using this information, you can build systems based on the ideas of a breakdown of range levels. Most of all, this tool can be useful in nightly tier trading.
Conclusion
Breakout indicator is a great addition to any trading system, as it allows you to make a profit at the very beginning of the trend after a night flat, which will not prevent the trader from continuing to work on his strategy. In addition, even a beginner in trading can use the tool. Examples of strategies implemented using the Breakout indicator can be found in the Strategies section of our website.
