The forex market is open 24 hours a day, five days a week. This means that traders can trade all day, every day, except on weekends. However, the forex market is not equally active throughout the day. There are three major trading sessions: the Asian session, the European session, and the North American session. In this article, we will focus on the Asian session and explain when it is and what makes it unique.
When is the Asian session forex?
The Asian session, also known as the Tokyo session, starts at 12:00 AM GMT and closes at 9:00 AM GMT. This means that it overlaps with the European session for a few hours, and with the North American session for a few hours as well. It is the first major session to open after the weekend, and it is the most active session for several currency pairs.
What makes the Asian session unique?
The Asian session is unique for several reasons. First of all, it is the most volatile session for the JPY currency pairs. This is because Japan is a major player in the forex market, and the Bank of Japan (BOJ) often intervenes in the market to manipulate the value of the yen. This intervention can cause significant price movements in the JPY pairs.
Secondly, the Asian session is also unique because it is the most active session for the AUD and NZD currency pairs. This is because Australia and New Zealand are major commodity exporters, and their currencies are closely tied to commodity prices. During the Asian session, traders often focus on news and data releases related to commodities, such as crude oil and gold.
Finally, the Asian session is also unique because it is the quietest session of the day. This is because most of the major financial centers are closed during this time, including London and New York. This means that the trading volume is lower during the Asian session, which can make it harder to find liquidity and execute trades quickly. However, this also means that the spreads are usually lower during this session, which can be beneficial for traders.
What are some strategies for trading during the Asian session?
Trading during the Asian session requires a different approach than trading during the European or North American sessions. Here are some strategies that traders can use during the Asian session:
1. Focus on JPY pairs: As mentioned earlier, the JPY pairs are the most active during the Asian session. Traders can focus on these pairs and look for opportunities to trade based on news and data releases from Japan.
2. Follow commodity prices: Traders can also follow the prices of commodities such as crude oil and gold, as these are closely tied to the AUD and NZD currency pairs. If commodity prices are rising, traders can look for opportunities to buy the AUD and NZD pairs, and if prices are falling, they can look for opportunities to sell.
3. Use longer time frames: Because the Asian session is quieter than the other sessions, it can be harder to find liquidity and execute trades quickly. Traders can use longer time frames, such as the 4-hour or daily charts, to find trading opportunities and set their trades with wider stop-losses and take-profit levels.
Conclusion
The Asian session is an important trading session in the forex market, and it offers unique opportunities for traders. Understanding the characteristics of the Asian session can help traders develop effective trading strategies and make informed trading decisions. By focusing on JPY pairs, following commodity prices, and using longer time frames, traders can take advantage of the opportunities presented during the Asian session.
