The forex market is a 24-hour market, which means that it is open for trading around the clock. This is because forex trading takes place across different time zones, with traders from all over the world participating in the market. As a result, there are several trading sessions that take place throughout the day, with each session having its own unique characteristics and opportunities.
One of the most important trading sessions in the forex market is the Tokyo session. This session takes place during the Asian trading hours, and it is known for its volatility and liquidity. In this article, we will take a closer look at when the Tokyo session starts and what makes it an important trading session for forex traders.
What is the Tokyo Session?
The Tokyo session is one of the three major trading sessions in the forex market, along with the London and New York sessions. It is also sometimes referred to as the Asian session, as it takes place during the trading hours of the Asian markets. The Tokyo session starts at 12:00 AM GMT and ends at 9:00 AM GMT.
The Tokyo session is known for its high volatility, as this is the time when most of the major Asian markets are open for trading. These markets include Japan, Australia, New Zealand, Hong Kong, and Singapore, among others. As a result, there is a lot of trading activity during this session, which can lead to significant price movements in the currency pairs that are traded.
What Makes the Tokyo Session Important?
There are several factors that make the Tokyo session an important trading session for forex traders. Here are some of the key reasons why traders pay close attention to this session:
1. High Volatility
As mentioned earlier, the Tokyo session is known for its high volatility. This is because it is the time when most of the major Asian markets are open for trading. These markets can have a significant impact on the global economy, especially Japan, which is the world’s third-largest economy. As a result, any news or events that affect these markets can have a significant impact on the currency pairs that are traded during this session.
2. Liquidity
The Tokyo session is also known for its high liquidity. This means that there are a lot of buyers and sellers in the market, which makes it easier for traders to execute their trades at the desired price. High liquidity also means that traders can enter and exit the market quickly, which can be beneficial for those who want to take advantage of short-term price movements.
3. Trading Opportunities
Another reason why the Tokyo session is important is that it provides traders with a range of trading opportunities. During this session, traders can take advantage of the volatility and liquidity to trade a range of currency pairs. Some of the most popular pairs that are traded during the Tokyo session include USD/JPY, AUD/USD, and NZD/USD, among others.
4. Overlapping Sessions
The Tokyo session also overlaps with the London session, which is another important trading session in the forex market. This overlap occurs between 7:00 AM and 9:00 AM GMT, which means that there is a lot of trading activity during this time. This can lead to increased volatility and liquidity, which can provide traders with more opportunities to trade.
Conclusion
In conclusion, the Tokyo session is an important trading session in the forex market. It takes place during the Asian trading hours and is known for its high volatility and liquidity. Traders can take advantage of the trading opportunities that are available during this session, including the ability to trade a range of currency pairs. By understanding when the Tokyo session starts and what makes it important, traders can make informed decisions about when and how to trade in this session.
