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How to trade forex during Asian hours – Guide
Do you want to know how to to trade forex during asian trading hours? The Asian session is also known as the Tokyo session. This session is considered the best time to start forex trading. Asian trading sessions are often overlooked due to their liquidity and volatility compared to other trading sessions. However, for traders familiar with forex trading, they do offer some unique features. features. Commercial banks and central banks are the main players in the Asian foreign exchange market. This is because Japan’s economic growth is heavily dependent on exports.
During Asian forex sessions, liquidity can be small and currency pairs can sometimes stay within a certain range. This condition is very likely to occur when the New York session follows a big move. Compared to GBP/USD, movements will be stronger in Asian currency pairs such as NZD/USD and AUD/USD. This is because most of the activity during Asian trading sessions takes place in the early stages. After the Asian trading session, a trader can predict the next market activity to start a successful trading journey.
How to Trade Forex during Asian trading hours
When considering trading during the Asian session, currency pairs are divided into major currencies, cross currency pairs (also known as crossovers), and exotics. Major currency pairs for the Asian session are US Dollar ($) – Japanese Yen (¥) or USD/JPY, Australian Dollar (A$) – US Dollar ($) or AUD/USD and Kiwi Dollar (N$) – US dollar ($) or NZD/USD. The main currency pairs of the global FOREX markets, which also include the EURO – US Dollar, Pound Sterling – US Dollar, US Dollar – Swiss Franc and US Dollar – Canadian Dollar, represent more than 70% of the market turnover and are considered the most liquid and popular trading pairs.
While the EUR-US Dollar may be the most traded currency globally, the US Dollar-Japanese Yen is the most traded currency during the Asian session, accounting for nearly 20% of daily currency trading. In recent years, China’s influence has also increased, with markets paying more attention to the Chinese central bank (PBoC) and the Chinese yuan’s daily fixation rate. How the PBoC corrects the Chinese yuan is an indication of how the central bank views Chinese economic prospects. Any devaluation would raise concerns that the economy is weakening, which would negatively affect emerging Asian currencies.
Currency pairs include major currencies but exclude the US dollar. Asian currency pairs are AUD/CAD, AUD/CHF, AUD/JPY, AUD/NZD, GBP/JPY and NZD/JPY, with Japanese Yen pairs being the most popular during the Asian session. Exotics are currencies that belong to economies that have little or no impact on the global economy and have significantly lower trading volumes and therefore much lower liquidity. As a result, exotic currencies are much more volatile and are considered much riskier, as reflected in their wider bid and ask spreads.
Asian exotics include the Thai baht, the Singapore dollar, the Philippine peso, the Malaysian ringgit, the Indian rupee and the Hong Kong dollar. In order to have access to all Asian currencies it is important to choose the right platform for trading, although it makes little sense to use a London or US based platform considering the need for liquidity, support and availability of fundamental and technical information. analysis of Asian currency pairs during the session.
Alpari is considered one of the best brokers for trading in the Asian foreign exchange market. The broker offers a fast execution environment supported by high liquidity and low transaction fees, as well as all the necessary analytical tools a trader needs to make trading decisions and execute them on a daily basis.
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