How to trade the asian session forex?

Stops are more likely to be activated before 9 am Tokyo when the market is quiet and on market holidays when the forex market is still open. Between 9 am and 10 am, Tokyo time is usually the most volatile time for the USDJPY and other forex pairs during the Asian session. Short-term traders can succeed in following the trend in the first 15 minutes, which can last until 10 am or longer. In conclusion, when trading during the Asian session, focusing on forex pairs with good volatility and well-formed trends is important.

  1. Considering the fact that the FX market trades 24 hours a day, official starting times are subjective.
  2. This prevents emotions from clouding judgment and ensures you maintain discipline in managing risk.
  3. You’ve probably heard the saying, “The early bird catches the worm.” This adage rings true in the world of forex trading, particularly during the Asian session.
  4. We aims to be a place where every forex traders can gain resources about trading.

Otherwise known as a London breakout Forex strategy, it involves taking advantage of a breakout of the current day’s range. Our London open Forex strategy puts a twist on one of the most popular strategies used by traders. After a master candle has been identified, zoom into an M15 chart and wait for price to reach the upper or lower range of the master candle. For this reason, we’ve adapted the strategy to fade Asian session breakouts and renamed it our Asian session scalping strategy.

Taking into account the early activity in financial futures, commodity trading, and the concentration of economic releases, the North American hours unofficially begin at 12 p.m. With a considerable gap between the close of the U.S. markets and the open of Asian trading, a lull in liquidity sets the close of New York trading at 8 p.m. The Asian markets have already been closed for a number of hours by the time the North American session comes online, but the day is only halfway through for European traders. The Western session is dominated by activity in the U.S., with contributions from Canada, Mexico, and countries in South America. As such, it comes as little surprise that activity in New York City marks the high volatility and participation for the session.

As you can see in the below image, when price action breakout the Asian high and low in the London session, it started holding below the breakout line, which confirms that the breakout is real. Another reason might be that when the Asian session opens, half of the world slept, that’s why the price action is less volatile in the market. In this article, we will show you the strategy we created, especially to take advantage of the Asian markets.

What currency pairs are best to trade during the Tokyo session?

The forex market during this session is known for its low volatility and narrow trading ranges. However, with the right strategies, traders can still find profitable opportunities. In this article, we will discuss some of the top strategies for trading during the forex Asian session. This strategy relies on volatility to trade breakouts on currency pairs that have the ability to make hard and fast moves through support/resistance.

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Founded in 2013, Trading Pedia aims at providing its readers accurate and actual financial news coverage. Our website is focused on major segments in financial markets – stocks, currencies and commodities, and interactive in-depth explanation of key economic events and indicators. One way to trade ranges is to look for sell signals when a market’s price trades near resistance while setting an initial take profit level near the bottom of the range.

Here are some tips on how to trade the Asian session forex:

In fact, some traders prefer trading during this session as it allows them to capitalize on small price movements. All information on The Forex Geek website is for educational purposes only and is not intended to provide financial advice. Any statements about profits or income, expressed or implied, do not represent a guarantee.

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One of the interesting features of the foreign exchange market is that it is open 24 hours a day. Around-the-clock trading allows investors from across the globe to trade during normal business hours, after work, or even asian session forex trading strategy in the middle of the night. However, not all times of the day are created equal when it comes to trading forex. Do you know how many trading sessions are there in the world and which are the best for your trading?

As there’s no time-based trigger within this session’s trading strategy, instead use the dynamic support/resistance indicator known as Bollinger Bands. Examples of good currency pairs to use in our London open Forex strategy are GBP/USD, EUR/USD and the highly volatile GBP/JPY. Example currency pairs to be used in our Asian session scalping strategy include EUR/USD, GBP/USD and USD/CAD. The major Forex currency pairs featuring European and North American currencies are perfect examples. Well, a typical trading day is broken up into 4 sessions, each with their own price action characteristics and market flows. By implementing effective breakout strategies and keeping an eye on overlapping sessions, you can increase your chances of success.

Leveraged trading in foreign currency or off-exchange products on margin carries significant risk and may not be suitable for all investors. We advise you to carefully consider whether trading is appropriate for you based on your personal circumstances. We recommend that you seek independent advice and ensure you fully understand the risks involved before trading. Information presented by DailyFX Limited should be construed as market commentary, merely observing economical, political and market conditions. It is not a solicitation or a recommendation to trade derivatives contracts or securities and should not be construed or interpreted as financial advice. Any examples given are provided for illustrative purposes only and no representation is being made that any person will, or is likely to, achieve profits or losses similar to those examples.

But if you can use this lower volatility to your advantage, then trading in the Asian session can be just as profitable as its more popular counterparts. Having a solid understanding of trading psychology and risk management is also crucial when implementing this or any other Forex strategy. There are many other notable countries that are present during this period, however, including China, Australia, New Zealand, and Russia. Considering how scattered these markets are, it makes sense that the beginning and end of the Asian session are stretched beyond the standard Tokyo hours. When liquidity is restored to the forex (or FX) market at the start of the week, the Asian markets are naturally the first to see action. Unofficially, activity from this part of the world is represented by the Tokyo capital markets and spans from midnight to 6 a.m.

Step two: Identify the trend and wait for the breakout

This prevents emotions from clouding judgment and ensures you maintain discipline in managing risk. For example, important economic data such as GDP reports, interest rate decisions, or employment figures from countries in the region like Japan and Australia can influence their respective currencies. A stop can be placed above the level of resistance as this is historically the level that prices have bounced back from. The chart below shows this effect with the Asian session depicted in the smaller blue boxes, while the London session and US session are depicted in the larger red boxes. We recommend that you seek independent financial advice and ensure you fully understand the risks involved before trading. Take profit would be the size of the master candle back in the other direction.

More liquidity can normally be seen instantly and traders often witness breakouts from established trading ranges. On a small timeframe (five – 30-minute chart) traders can wait to see a candle close above or below the trading range witnessed in the Asian session. If price breaks below the range, traders can enter the trade placing a tight stop at the recent swing high.

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