The Asian Trading Session

One of the best things about the Forex trading market is that sessions take place around the clock thanks to trading locations around the globe. One such example is the Asian trading market. In fact, the Asian market sort of has two different starts to it. The Sydney market opens at 6:00 PM EDT but things really get volatile an hour later at 7:00 PM EDT. That’s when the biggie on that end of the planet starts when the Tokyo market opens.

Why to keep Tokyo market on your radar

Japan happens to have the third largest world economy in gross domestic product. Plus, it is home to third largest Forex trading market. This also means that the Japanese home currency, the Yen, is the third most traded Forex currency. The Asian trading market also includes Hong Kong and Singapore and to give you an idea of volume, the Asian market trades roughly 20% of all Forex activity. In other words, one-in-five trades in Forex are at this session.

Here’s another reason to keep the Asian market on your trading radar. It happens to be the first major market in the world to open each day. What this means is that while many parts of the world are still asleep, you can get a snapshot of what the rest of the trading day may look like thanks to the Asian market.

You want volatility?

Well, as we mentioned, the Yen is a hot currency in this part of the world and when added to certain currency pairs you best be ready for an interesting ride. Some of the risk-tolerant traders point to GBP/USD, AUD/JPY, GBP/JPY and EUR/JPY pairs as hot potatoes well worth getting in on as the trading day action kicks into high gear.

Largest owners of US treasuries are China and Japan

You may already know that the largest owners of US treasuries are China and Japan. Read that line again. Because of this the central banks in these countries are responsible for supply and demand pressure on the USD/JPY currency pair. The pairs already listed here are the one that provide the most trading opportunities as a result. However, this comes with a warning. Because these currency pairs are so volatile (think hot potatoes) they are also the highest in risk to trade. If you keep an eye on the time you will also note that as the Asian session progresses, the London session is nearing its opening for the day which will likely see posturing related to the movement that had just been witnessed in the Asian market.

If your trading strategy includes being on top of some trend setting trades, following the end of the Asian market into the London session could produce some interesting results. If, for example, you are not into risk taking, USD/JPY and USD/CHF currency pairs are well, safer to take advantage of because of the low volatility they possess. In fact, this alone can assist you in developing your own long-term trading game plan.

 

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