ICT Asian Session Liquidity Sweep Model

 

The Asian Session Liquidity Sweep Model is a popular forex trading strategy employed during the Asian trading session. This approach leverages the concept of a liquidity sweep that typically occurs at the Asian session’s high and low points, often driven by significant institutional activity

The Asian Session: An Overview

The Asian trading session initiates at 20:00 New York time and concludes at 2:00 New York time. It’s a crucial time for forex trading, as it sets the tone for the day, with significant participation from Asian and Australian markets.

Strategy Execution: Step-by-Step

Follow these steps to effectively implement the Asian Session Liquidity Sweep Model strategy:

1. Wait for the Asian Session to Commence

Exercise patience and initiate your trading activities as the Asian trading session begins, starting at 20:00 New York time.

2. Identify Asian High and Low Points

Determine the highest (Asian high) and lowest (Asian low) price points reached by the market during the Asian session. These levels are pivotal for the strategy.

3. Monitor for a Liquidity Sweep during Lunch Hour

Observe the market during the New York lunch hour (12:00 to 1:00 New York time) for a sudden surge in volume and volatility, indicating a liquidity sweep at either the Asian high or low.

4. Identify a Market Structure Shift (MSS)

Look for a shift in market structure, such as a change in trend direction, after the liquidity sweep. For example, if the market had been in a downtrend and the sweep occurs at the Asian low, watch for signs of a trend reversal to the upside.

5. Execute Your Trade

Once you identify a Market Structure Shift, initiate your trade in alignment with this shift.

6. Prioritize Risk Management

Implement effective risk management by limiting each trade’s risk to 1% of your account balance. Additionally, set stop-loss levels to minimize potential losses.

Example of Liquidity Sweep

Illustrative Trade Example

Let’s walk through a hypothetical trade using the Asian Session Liquidity Sweep Model strategy:

1. Asian session begins at 20:00 New York time, and the market achieves a new high at 1.1000.
2. During the New York lunch hour, a liquidity sweep occurs at the Asian low of 1.0950.
3. Following the sweep, a Market Structure Shift towards an upward trend is observed.
4. Enter a long trade at 1.0975, placing a stop loss below 1.0950 to mitigate risk.