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How to Trade Forex During the Asian Trading Hours? The Best Pairs and Strategy

HomeForex TradingHow to Trade Forex During the Asian Trading Hours? The Best Pairs and Strategy

tokyo session forex pairs

Night trading may also create opportunities for traders to profit from retracement of large gains or losses in currency pairs during the US and European sessions, as they can often pull back during night trading. For example, if the EUR/USD pair ended the US session close to the technical resistance, it could move lower in the Asian markets overnight. However, trades should always conduct their own due diligence to identify such signals. When trading currencies, a market participant must first determine whether high or low volatility will work best with their trading style. Trading during the session overlaps or typical economic release times may be the preferable option if more substantial price action is desired.

Experienced traders use Stochastic and RSI indicators to see the buy and sell signals. The price reaching the resistance level is a sign to sell, and the price hovering near the support line is a signal to buy, as the general wisdom goes. It is during this session that the main features and benefits of the Asian session apply, yet the interesting price movement pattern begins when the Asian and London sessions overlap. One last note is that this session leans heavily on data released from China. Keep a close eye on the data that comes out of that country when trading in this session to see the facts and figures that will have the largest impact on pairs that tend to move in the Tokyo session. All information on The Forex Geek website is for educational purposes only and is not intended to provide financial advice.

Forex Pairs to trade during the Tokyo session:

To continue learning the basics of FX, check out our guide on forex trading for beginners, or attend one of our forex trading webinars hosted by expert market analyst, Desmond Leong. The first trading session to start the week is known as the Sydney session, even though the trading starts in New Zealand first. Carry trading is more of an investment type of strategy than actual trading since you wish to hold the position as long as possible (or as long as it is profitable). Consequently, the AUD/JPY pair has normally been very popular with carry traders. Although the US is not Australia’s largest export market, the AUD/USD is the most liquid currency pair among those that can be used to speculate on the strength of the Australian dollar. Another important thing about the Sydney session is that it actually overlaps about 2 hours with the Tokyo session.

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Forex Market Hours

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. In this article, we will discuss which forex pairs are traded during each session and why traders should be aware of these pairs. Below is a table of the Asian session pip ranges of the major currency pairs. Nick has over 25 years of financial market experience as a commodities and foreign exchange trader in investment banks and prop firms.

What is the best time to trade euro JPY?

The first thing you'll need to do when trading the EUR/JPY is find out when the best trading hours are. In this case the pair tends to have the greatest liquidity between 13:00 and 16:00 GMT. This is when the New York and London sessions overlap.

While the market is anticipating a vital report, trading activity can be low because everyone is uncertain about the outcome of the news. During this period, the market is quiet, and traders are analysing how to begin the new week instead of jumping right into trading. There are low trading activities at the closing hours of the market on Friday; you may also want to avoid trading during this period. During this time, the market is busy with active participants, currencies move very quickly, and the most important economic news is also published in this time period. Forex traders should proceed with caution, because currency trades often involve high leverage rates of 1,000 to 1. While this ratio offers tantalizing profit opportunities, it comes with an investor’s risk of losing an entire investment in a single trade.

The New York trading session

For instance, if you are available to trade from 0800hrs GMT to 1200hrs GMT (during the London session), you are better off trading EUR and GBP pairs. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. No representation or warranty is given as to the accuracy or completeness of this information. Range trading relies on the assumption that price fluctuates between support and resistance, and once it reaches the top value within the range, it is supposed to fall back.

It is recommended to find a local broker that operates during the Asian trading hours as decreasing trading errors and having helpful support team from your broker can significantly increase your trading confidence. Alpari operates since 1999 and considered to be a reliable broker with a wide selection of instruments. If there is no restriction though, the general consensus is that the best time to trade is when the different trading sessions overlap.

New York forex trading session

So, looking at the prices’ moves during those nighttime hours can prompt you how to plan your strategies during other forex sessions. In conclusion, knowing which forex pairs trade the best in each session is crucial for traders looking to optimize their strategy and maximize their profits. During the European session, the EUR/USD and GBP/USD are particularly active. Finally, during the American session, the USD/CAD and USD/CHF are heavily traded. Traders should pay attention to news and economic data releases to capitalize on price movements in these forex pairs. The forex market is open 24 hours a day during weekdays, but this does not necessarily mean that you should trade forex assets at any time, or all day.

What pairs are most active during Tokyo session?

The most actively traded currency pairs during the Asian session are the JPY crosses. These pairs include USD/JPY, EUR/JPY, AUD/JPY, and NZD/JPY. The reason for this is that Japan is the largest economy in the Asian region, and the Japanese yen (JPY) is a major currency.

The first of these windows, between New York and London, is possibly the most important. The content published above has been prepared by CFI for informational purposes only and should not be considered as investment advice. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell. Market data is derived from independent sources believed to be reliable, however, CFI makes no guarantee of its accuracy or completeness, and accepts no responsibility for any consequence of its use by recipients. The current exchange rate is 1.019 meaning that 1 Euro costs 1.019 US dollars.

When Can You Trade Forex: Tokyo Session

The Tokyo session overlaps with Sydney session since two trading centers are open for five hours simultaneously. The USD/JPY, NZD/USD, AUD/USD and the AUD/JPY would include lots of liquidity thus huge trading volume. Theoretically, you can trade all currency pairs available on the market, but for the given session, it is reasonable to pick the pairs that can bring the highest profits. Currency pairs with the Japanese Yen are probably your best bet during these hours (JPY). Forex traders can get decent liquidity during the Asian session by matching Singapore dollars, Australian dollars, and New Zealand dollars, depending on the approach they choose to employ (SGD).

This pair shows the exchange rate between the Japanese Yen and US Dollar, dictating how many Yen you need to buy one dollar. There are several Forex pairs you can choose to trade during the Sydney session, the most common of which are AUD/NZD, USD/CHF, AUD/JPY, GBP/USD, EUR/USD, and USD/JPY. It’s worth noting that there is an overlap between the respective sessions, with the last hour of the Tokyo session overlapping with the first hour of the London session.

There are 4 main forex trading sessions with opening/closing hours based on the biggest financial centers. Such combinations like USD/JPY, AUD/JPY, EUR/JPY, NZD/USD, and NZD/JPY can be handy. For investors aiming for extreme volatility in the forex market during the Tokyo session, these options are preferable.

  • Night trading on the forex markets has advantages for new traders as volatility tends to be lower and for experienced traders using scalping or automatic trading strategies that tend to work well with less volatility.
  • While there are fewer markets than attractive to short-term traders during the Tokyo session, traders who become specialists will find consistent market patterns that can be profitably traded.
  • A trader will then need to determine what time frames are most active for their preferred trading pair.
  • The NZD, or kiwi, as forex traders sometimes call it, is a widely traded currency in the Sydney session, so it can be a good choice if you are looking for currencies that are more active during this time.
  • Those looking to employ longer-term strategies may also consider an early entry by trading at night.

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