Major Forex Trading Sessions from Around the World
What are sessions in forex?
Typically, the market is separated into three sessions during which
activity is at its peak and which comprise the 24-hour market: the
Asian, European and North American sessions. More commonly, these three
periods of
Forex trading hours
are known as the Tokyo, London, and New York sessions.
Tokyo Session
The opening of the Tokyo session at 12:00 AM GMT marks the start of the
Asian session. You should take note that the Tokyo session is sometimes
referred to as the Asian session because Tokyo is the financial capital of
Asia.
One thing worth noting is that Japan is the third largest forex trading
center in the world.
This shouldn't be too surprising since the yen is the third most traded
currency, partaking in 16.50% of all forex transactions. Overall, about
21% of all forex transactions take place during this session.
Best pairs for Tokyo and Sydney session
Below is a table of the Asian session pip ranges of the major currency pairs.
Take note that these are NOT ABSOLUTE VALUES and can vary depending on
liquidity and other market conditions.
Here some key characteristics that you should know about the Tokyo
session:
• Action isn't only limited to
Japanese shores. Tons of forex transactions are made in other financial
hot spots like Hong Kong, Singapore, and Sydney.
• The main market participants
during the Tokyo session are commercial companies (exporters) and
central banks. Remember, Japan's economy is heavily export dependent
and, with China also being a major trade player, there are a lot of
transactions taking place on a daily basis.
• Liquidity
can sometimes be very thin. There will be times when trading during this
period will be like fishing - you might have to wait a long, long time
before getting a nibble.
• It is more likely that you will
see stronger moves in Asia Pacific currency pairs like AUD/USD and
NZD/USD as opposed to non-Asia Pacific pairs like GBP/USD.
• During those times of thin
liquidity, most pairs may stick within a range. This provides opportunities for
short day trades or potential breakout trades later in the day.
• Most of the action takes place
early in the session, when more economic data is released.
• Moves in the Tokyo session
could set the tone for the rest of the day. Traders in latter sessions
will look at what happened during the Tokyo session to help organize and
evaluate what strategies to take in other sessions.
• Typically, after big moves in
the preceding New York session, you may see consolidation during the
Tokyo session.
Which Pairs Should You Trade in Tokyo Session?
Since the Tokyo session is when news from Australia, New Zealand, and
Japan comes out, this presents a good opportunity to trade news events.
Also, there could be more movement in yen pairs as a lot of yen is
changing hands as Japanese companies are conducting business.
Take note that China is also an economic super power, so whenever news
comes out from China, it tends to create volatile moves. With Australia
and Japan relying heavily on Chinese demand, we could see greater
movement in AUD and JPY pairs when Chinese data comes in.
Best Forex Pairs in the Tokyo session
You can make useful combinations like JPY/USD, AUD/JPY, EUR/JPY, NZD/USD,
NZD/JPY. These options are better for investors that are looking for high
volatility in the Forex market during the Tokyo session.
Next Read:
London Session,
New York Session.
Session Overlap.
May 05, 2021
Tags :
Forex Session
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