The global forex market is a 24-hour market that truly never sleeps since it operates round the clock from Monday to Friday. The forex market is divided into four major trading sessions: the Asian session, the European session, the North American session, and the Pacific session. Each of these sessions operates during specific hours and has unique characteristics that traders must understand.
The Asian session is the first session in the forex market and begins at 7 pm EST (Eastern Standard Time) on Sunday and ends at 4 am EST on Monday. This session is also known as the Tokyo session and is considered the most active forex trading session. It is primarily driven by the major financial centers in Asia, including Tokyo, Hong Kong, Singapore, and Shanghai.
The Asian session is characterized by low volatility compared to the other trading sessions. However, this does not mean that there are no opportunities to make profits during this session. Traders can capitalize on the low volatility by using technical analysis to identify key support and resistance levels. These levels can be used to set up trades in anticipation of a breakout or a reversal.
One of the significant advantages of trading during the Asian session is that it offers traders the opportunity to trade major currency pairs such as USD/JPY, EUR/JPY, and AUD/USD. These pairs are known for their tight spreads and high liquidity, making them ideal for both short-term and long-term trading strategies.
Another advantage of trading during the Asian session is that it overlaps with the European session. This overlap between the two sessions creates a period of high volatility, especially when economic data is released from the eurozone. This volatility presents traders with opportunities to make significant profits in a short period.
During the Asian session, the Bank of Japan (BOJ) and other central banks release important economic data, including interest rate decisions and monetary policy statements. These announcements can have a significant impact on the forex market, leading to large price movements. Therefore, traders must keep an eye on the economic calendar to stay up-to-date with the latest news and events.
The Asian session is also characterized by the presence of major market players such as institutional investors, hedge funds, and banks. These players have a significant impact on the forex market, and their trading activities can lead to price movements in specific currency pairs. Therefore, traders must be aware of their activities and adjust their trading strategies accordingly.
In conclusion, the Asian session of the forex market begins at 7 pm EST on Sunday and ends at 4 am EST on Monday. It is the most active trading session, primarily driven by the major financial centers in Asia, including Tokyo, Hong Kong, Singapore, and Shanghai. Trading during this session offers traders the opportunity to trade major currency pairs with tight spreads and high liquidity. Additionally, the overlap between the Asian session and the European session creates a period of high volatility, presenting traders with opportunities to make significant profits. Traders must keep an eye on the economic calendar and be aware of the activities of major market players to adjust their trading strategies accordingly.
