The forex market operates 24 hours a day, 5 days a week, and is divided into four major trading sessions: the Sydney session, the Tokyo session, the London session, and the New York session. The Asian session, which includes the Sydney and Tokyo sessions, is one of the most important trading sessions in the forex market, and it starts when the Sydney session opens.
The Sydney session is the first trading session of the day and it starts at 10:00 PM GMT (5:00 PM EST). This trading session is named after the financial center of Australia, which is Sydney. This session is relatively quiet compared to the other sessions, and it is characterized by low volatility and low liquidity. However, it is still an important session because it provides traders with the first opportunity to react to news and events that took place during the Asian session.
The Tokyo session is the second trading session of the day and it starts at 00:00 AM GMT (7:00 PM EST). This trading session is named after the financial center of Japan, which is Tokyo. The Tokyo session is one of the most active trading sessions in the forex market, and it is characterized by high volatility and high liquidity. This session is important because the Japanese yen is one of the most traded currencies in the forex market, and many traders use the Tokyo session to trade the yen.
The Asian session is also important because it overlaps with the European session, which is the most active trading session in the forex market. The European session starts at 08:00 AM GMT (3:00 AM EST), and it is characterized by high volatility and high liquidity. The overlap between the Asian and European sessions is a critical time for traders because it provides them with the opportunity to trade currencies that are related to both regions, such as the euro and the yen.
During the Asian session, several economic events take place that can affect the forex market. These events include economic data releases, central bank announcements, and geopolitical events. For example, if the Bank of Japan announces an interest rate hike during the Tokyo session, it can cause the yen to strengthen against other currencies. Similarly, if there is a geopolitical event that affects the Asian region, such as a natural disaster or a political crisis, it can cause volatility in the forex market.
Traders who want to trade the Asian session should be aware of the characteristics of this trading session. They should be prepared for low volatility and low liquidity during the Sydney session, and high volatility and high liquidity during the Tokyo session. They should also be aware of the economic events that are scheduled to take place during the Asian session and how they can affect the forex market.
In conclusion, the Asian session is an important trading session in the forex market, and it starts when the Sydney session opens. This trading session is characterized by low volatility and low liquidity during the Sydney session, and high volatility and high liquidity during the Tokyo session. Traders who want to trade the Asian session should be aware of the economic events that are scheduled to take place during this trading session and how they can affect the forex market.
