Abstract：While the currency market is open for 24 hours, 6 days a week, there is a particularly golden window of opportunity which you can profit from.As you already know, profit is found in price movements. You will want to exploit this golden window of opportunity to reduce frustration due small price movements and lost time. You will learn 3 general tips before we dive into a specific trading session!
While the currency market is open for 24 hours, 6 days a week, there is a particularly golden window of opportunity which you can profit from.
As you already know, profit is found in price movements. You will want to exploit this golden window of opportunity to reduce frustration due small price movements and lost time. You will learn 3 general tips before we dive into a specific trading session!
Time Zone
The table above shows the major trading sessions around the globe. The time zones have been accounted for daylight savings).
The trading day begins with Australia, Asia (Japan, Hong Kong and China), Europe (London), and lastly USA (New York).
There are 2 overlaps between the markets trading hours. The most significant overlap occurs when the markets in the USA open.
While the currency market is open for 24 hours, 6 days a week, there is a particularly golden window of opportunity which you can profit from.
As you already know, profit is found in price movements. You will want to exploit this golden window of opportunity to reduce frustration due small price movements and lost time. You will learn 3 general tips before we dive into a specific trading session!
Time Zone
The table above shows the major trading sessions around the globe. The time zones have been accounted for daylight savings).
The trading day begins with Australia, Asia (Japan, Hong Kong and China), Europe (London), and lastly USA (New York).
There are 2 overlaps between the markets trading hours. The most significant overlap occurs when the markets in the USA open.
Source: forexearlywarning.com
Golden Window Of Opportunity
The golden window of opportunity (main trading session) begins at the start of Europe‘s (London’s session) and ends at the beginning hours when USA (New York) starts. Refer to the chart above.
Trading activity is the highest during that time frame.
When To Trade What？
Source:babypips.com
The bar chart above breaks down the price movement of the different pairs across trading sessions. Which trading session stands out for bringing the largest price movement？ You have an instant edge over many other retail traders knowing the answer. It is London.
By knowing this, you can expect a larger profit target when you trade the London session.
Does that mean you can only trade in the London session？ Of course not! Read on and see how you can profit during the Asian session.
4 Secrets You Must Know About The Asian Session Trading Hours
The Asian session begins at 12am GMT. It is often referred to as the Tokyo (the capital of Japan) given that Japan is the 3rd largest Forex trading centre in the world.
#1 Reasons
Reason 1: JPY is the 3rd most traded currency in the world, making up about 16.5% of all transactions.
Reason 2: Around 21% of all Forex transactions take place during this session.
Yes, there are a handful of other financial hubs in Asia, namely Hong Kong and Singapore. However, Japans economy is heavily dependent on exports. This means that the JPY is highly traded all the time. Do you remember that most countries require import and export activities to be paid in their local currency？
#2 Characteristics
The main participants during the Asian session are commercial companies (exporters) and central banks. As such, liquidity can be thin (in the absence of news) and currency pairs are usually range bound.
Breakout trades do not usually happen and most of the trading activities take place early in the session where more economic data is released.
#3 Average Pip Movement
The table below shows the average pip movement during the Asian session.
Please note that this table is not all-inclusive and the range may differ from time to time depending on various conditions such as news and specific economic trading activity.
#4 Which Pairs Should You Trade？
You guessed it! You should focus on the pairs with a wider range and trade those.
It also pays to be aware of the news and economic data of China as China is a major trading partner with Australia and Japan. A shocking piece of data will definitely impact the currencies of both countries.
Conclusion
Trading during the Asian session can be rewarding with the right expectations. It is ideal for you if you live in the West! You can grab dinner and start the moment you get home.
This is also particularly good for those who prefer a more sedated form of Forex trading.
For those living in the East or are looking to capture opportunities when the markets in the West are open, the next article will be for you.
【About The Author】
An independent trader who seeks to educate through his own trading experiences, Jay began his own trading journey at the age of 22.
He is a self-taught trader who has read more than 200 books on trading and investment since college and created his trading methodologies modelling after several successful veteran traders.Jay has since amassed 10 years of experience trading different market conditions with consistency. Of the many disciplines in trading, he specializes in trading options, swing trades on equities, currencies,futures and contract-for-difference (CFDs).
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