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FXSnipers Quantitative Desk Series

USDJPY Tokyo Fix Fade Strategy

Forex • USDJPY • M15 • Mean Reversion
Tokyo Fix Session
23:00 - 04:00 UTC
Complexity: Advanced
Max Risk 0.5% - 1.0% maximum equity risk per execution.
Target R:R Multi-tier target: 50% position closed at the 50% move retracement, remaining 50% closed at the 23:00 UTC open price (minimum 1:2 R:R).
Break-Even Trigger Instantly move stop-loss to breakeven upon hitting the first partial profit target at the 50% retracement level.
Automation Rule-dependent

Pre-Trade Verification Checklist

Check Macro and News Calendar: Ensure no high-impact USD or JPY news occurs before 04:00 UTC and it is not a post-BoJ meeting Friday.
Measure Pre-Fix Move: Calculate distance from 23:00 UTC open to 00:55 UTC close and verify it falls between 0.8x and 2.0x H1 ATR(14).
Filter Trend Strength: Confirm that H1 ADX(14) is below 25 to validate a ranging, mean-reverting market regime.
Verify RSI Oscillator Exhaustion: Check that M15 RSI(14) turned downward from >65 (for shorts) or upward from <35 (for longs).
Execute and Manage Risk: Enter on M15 close, set stop-loss at move extreme + 0.3x ATR, and program partial TP at 50% retracement.

Entry Execution Criteria

  1. Measure the absolute price move from the 23:00 UTC open to the 00:55 UTC close. Ensure the move is between 0.8x and 2.0x of the H1 ATR(14).
  2. Verify that H1 ADX(14) is strictly below 25, confirming an absence of a strong macro trend.
  3. Enter on the first M15 candle close after 00:55 UTC in the direction counter to the move, confirmed by M15 RSI(14) crossing back down from above 65 (for short setups) or crossing back up from below 35 (for long setups).

Take-Profit & Target Exit

  • Take 50% partial profit at the exact 50% Fibonacci retracement level of the pre-fix move, and instantly move the remaining position stop-loss to breakeven.
  • Target the remaining 50% position at the 23:00 UTC open price, subject to a minimum 1:2 Risk-to-Reward ratio.
  • Hard time-based exit: Close all remaining open trades unconditionally at 04:00 UTC.

Invalidation & Emergency Exit

  • Void the setup if the pre-fix move from 23:00 UTC to 00:55 UTC is less than 0.8x ATR or exceeds 2.0x ATR.
  • Invalidate the signal if H1 ADX(14) is greater than or equal to 25 at the time of evaluation.
  • Cancel entry if the current broker spread exceeds 15% of the calculated stop-loss distance.
Stop-Loss Positioning

Placed beyond the extreme high or low of the pre-fix move plus an additional buffer of 0.3x H1 ATR(14).

Documented & Formatted by FXSnipers Strategy Lab • fxsnipers.com/strategy-lab/usdjpy-tokyo-fix-fade-strategy
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