This strategy is known as the Cherry Blossom Trading Strategy because it relies on the overlap between the American and Asian sessions. It operates on the principle that the price movement during the American session sets the stage for the market direction in the Asian session. The strategy involves monitoring price movements during the American session, and then making trading decisions in the Asian session based on the trends that have already emerged. Its name is inspired by Japanese cherry blossoms, which are not limited to Japan but also extend across the Pacific region, between the western coast of the United States and the eastern coasts of Asia.
The Cherry Blossom Trading Strategy is based on the idea that the American and Asian sessions rarely move in the same direction. When the market is trending upwards during the American session, it is often followed by a downward correction during the Asian session before the price returns to its original direction as the next American session begins.
The core of this strategy lies in capitalizing on the corrective movements that occur during the Asian session through pending trade orders based on range trading, rather than betting on the continuation of the previous trend. This principle is rooted in a well-known rule among traders: prices cannot continue in one direction forever and must experience periodic corrections, whether the trend is bullish or bearish.
Thus, the timing and magnitude of the correction largely depend on the nature of the previous price wave. According to this strategy, the American session is considered the “price wave,” while the Asian session represents the “correction” phase, offering an opportunity to capitalize on market movements intelligently.
Cherry Blossom Trading Strategy Approaches
The Cherry Blossom Trading Strategy offers a variety of approaches, which are selected based on the current market conditions and the trader’s goals. Below is the first approach for this strategy:
Cherry Blossom Trading Strategy – Approach One
• Finding a Promising Financial Instrument During the American Session:
During the American session (from 16:00 to 00:00), look for a financial instrument that has experienced a strong price movement exceeding 30-50 points in a clear direction.
• Applying Fibonacci Levels:
Once the appropriate instrument is identified, plot Fibonacci levels on the price movement that occurred during the American session, using the following levels: 100, 61.8, 50, 38.2, 23.6, 0.0.
• Setting Pending Orders for Waiting:
Before the start of the Asian session (at 02:00), place pending orders at the Fibonacci levels (61.8, 50, 38.2, 23.6), where notable price movements are expected to occur at these points.
• Placing Stop Loss Orders:
Place stop-loss orders at the Fibonacci 100 level to protect the trade in case the price reverses suddenly.
• Setting Take Profit Orders:
Place take-profit orders at the Fibonacci 0.0 level, where the price is expected to return after the correction.
• Monitoring Order Execution:
After placing the orders, no manual intervention is necessary. The pending orders will automatically be activated when the price reaches the specified levels, and the closures will occur according to the pending orders.
• Closing Orders at the End of the Session:
At the end of the Asian session, all floating trades are closed, and any pending orders that were not executed are deleted, in preparation for the next session.
The goal of this approach is to capitalize on the expected price corrections between sessions to achieve quick profits without manual intervention.
Cherry Blossom Strategy - Approach Two
• Look for a Zigzag Pattern, Not Necessarily Sideways:
Identify a price pattern that is zigzag in nature, though it doesn’t have to be fully sideways.
• Apply Fibonacci Levels:
Use Fibonacci levels from the lowest point of the wave to its highest peak.
• Set Pending Orders:
Set the pending orders as described in step three of the first approach.
• Place Stop-Loss Orders:
Set stop-loss orders at the 100 Fibonacci level.
• Set Take Profit Orders:
Set take-profit orders at the 0.0 Fibonacci level.
• Monitor and Wait:
Allow the pending orders to activate automatically as the price reaches the set levels, entering trades and closing them according to the predefined pending orders.
• At the End of the Wave:
Close all floating orders and delete any pending orders that were not executed.
Summary:
The Cherry Blossom Strategy focuses on exploiting price movements between the American and Asian sessions by observing corrections using Fibonacci levels. Pending orders are set to capitalize on subsequent price movements. The aim is to make profits from price corrections without manual intervention, making it an effective strategy for traders in global markets.
