Trading in south east asia forex market – Everything you need to know

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Written By Irwin Andriyanto

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Forex trading is the exchange of one currency for another. It is one of the most active marketplaces in the world, attracting more than $5 trillion daily. It is made up of a network of buyers and vendors.

The currency market is open 24 hours a day, seven days a week. It is, however, separated into several groups. The Asian session can be slower and more challenging to trade in.

As a result of the low volume and high spreads that characterize the session, traders must be aware of the best forex pairs to trade in.

The Asian session is also known as the Tokyo session. It starts with the opening of Sydney (22:00 GMT) and ends with the closing of Tokyo (08:00 GMT). Japan is the world’s third-largest forex trading center.

While this period is known as the Tokyo session, it is not limited to Japan. There are also active participants from Hong Kong, Singapore, and Sydney. The Asian session accounts for around 20% of the forex trading volume.

What’s interesting is that Singapore and Hong Kong now have larger forex trade volumes than Tokyo. Singapore and Hong Kong each accounted for 7.6% of the total volume, while Japan accounted for 4.5%.

the Asian market

There are many great benefits and key features of trading in the Asian session. Here are a few:

Clearer Entry & Exit Points – Because of the phases of resistance and support, traders are provided with opportunities to withdraw or initiate transactions. By combining this with the signals from indicators, a trader can increase their odds of entering a good trade.

Easier to Predict – Price running primarily inside the support-and-resistance bands provides relative predictability. Price movements are more predictable, so a trader may anticipate where the price surge will lead and when it will retrace. If you want more consistency in your trading, the Asian session is for you.

Better Risk Management – Because of the calm character of the Asian session, traders can better monitor their deals and examine the rewards and dangers. Furthermore, resistance and support levels are easier to locate in the Asian market because they are generally exact and coexist with the trading range.

Follow the Economic Calendar

A plan is essential for anyone trying to trade forex. So here are a few strategies to consider when trading during Asian sessions.

Follow the Economic Calendar

Understanding the economic calendar and the level of importance of data released monthly, quarterly, or semi-annually is a significant issue for both short-term and long-term traders.

For short-term traders, predicting whether a data release will be positive, neutral, or damaging for a specific currency presents numerous trading opportunities, with much of the price action occurring in the hour preceding the release, during the release, and in the ten to fifteen minutes following the release.

The bigger the departure of the data published from projections, the greater the volatility upon release and in the minutes following release.

Dissect the Market with Scalping

This is a twist on the traditional master candle trading approach. A master candle has four or more bars printed on it. While most master candle trading methods seek to trade breakouts, they frequently lack momentum during the Asian session.

Use an H1 chart and the trend line tool to identify the high and low points of the candles to find master candles. Zoom into an M15 chart after identifying a master candle and wait for the price to reach the upper or lower range of the master candle. A long signal is generated when the price falls five pips below the low of the master candle.

A short sign will be developed five pips above the high of the master candle.

Breaking into the Market with a Breakout Strategy 

After determining the opening time of the London session based on your local time, the next step is to sit at your desk one hour before the London session begins and determine which currencies fared better in the Asian session, marking the Asian session High and Low.

The next stage is to wait for the London session to commence and then trade in that direction if the price action breaches the Asian session high or low. Because London is the most extensive session, you should always expect longer moves.

Because this method was designed specifically for intraday traders, they always trade the Asian highs and lows on lesser timeframes, such as 5, 15, or 30 minutes.

Closing Thoughts

Traders of varying levels of expertise have traditionally approached the Asian market with caution due to factors such as wide spreads, and volatility.

However, with a proactive approach, these same features can be leveraged to generate successful outcomes. This market can be beneficial if you know how to trade.

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