Forex trading is a global phenomenon that takes place 24 hours a day, five days a week. Trading sessions are divided into three major geographical regions: the Asian session, the European session, and the North American session. The Asian session is the first forex trading session that opens for the week, and it is considered to be the most active trading session, with a high volume of trades, especially in the forex pairs that involve the Japanese yen. In this article, we will explain how to trade the Asian session forex.
What is the Asian session?
The Asian session starts when the Tokyo Stock Exchange opens at 7:00 PM EST (12:00 AM GMT) and closes at 4:00 AM EST (9:00 AM GMT). The Asian session is also known as the Tokyo session because Tokyo is the financial capital of Asia. Other major financial centers in the Asian session include Hong Kong, Singapore, and Sydney.
What are the benefits of trading the Asian session?
Trading the Asian session has several benefits. First, it offers a high volume of trades, especially in forex pairs that involve the Japanese yen. Second, the Asian session offers traders the opportunity to trade during the news announcements from Japan, China, and Australia. Third, the Asian session overlaps with the European session, which means that traders can take advantage of the volatility created by the market participants in both sessions.
What are the best currency pairs to trade during the Asian session?
The best currency pairs to trade during the Asian session are the ones that involve the Japanese yen. These pairs include USD/JPY, EUR/JPY, GBP/JPY, AUD/JPY, and NZD/JPY. Other currency pairs that are popular during the Asian session include AUD/USD, NZD/USD, and USD/CHF.
How to trade the Asian session forex?
Here are some tips on how to trade the Asian session forex:
1. Monitor the news announcements
The Asian session is known for the news announcements from Japan, China, and Australia. These announcements can have a significant impact on the forex market, especially the currency pairs that involve the Japanese yen. Traders should monitor the economic calendar and be aware of the news announcements that are scheduled during the Asian session.
2. Use technical analysis
Traders should use technical analysis to identify the key levels of support and resistance in the forex pairs they are trading. The Asian session is known for its low volatility, and traders should use technical analysis to identify the potential breakouts and reversals in the market.
3. Use the Tokyo open strategy
The Tokyo open strategy is a popular trading strategy that involves trading the first hour of the Asian session. The strategy involves identifying the high and low of the first hour of trading and placing buy or sell orders based on the breakout of these levels.
4. Use the momentum strategy
The momentum strategy is a popular trading strategy that involves trading the momentum of the market. Traders should identify the currency pairs that are showing strong momentum during the Asian session and place buy or sell orders based on the direction of the momentum.
5. Use the carry trade strategy
The carry trade strategy involves buying a currency with a higher interest rate and selling a currency with a lower interest rate. Traders should identify the currency pairs that offer a positive carry and place buy orders on these pairs during the Asian session.
Trading the Asian session forex can be profitable if traders follow the tips and strategies outlined in this article. Traders should monitor the news announcements, use technical analysis, and use popular trading strategies like the Tokyo open strategy, momentum strategy, and carry trade strategy. Trading the Asian session forex requires discipline, patience, and a sound trading plan. With the right mindset and approach, traders can take advantage of the opportunities offered by the Asian session forex.