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Chapter 4, Part II. Japan Trading Session.

Discussion in 'Complete Trading Education- Forex Military School' started by Administrator, Mar 23, 2011.

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  1. Administrator

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    Part II. Japan trading session [​IMG]
    Commander in Pips: When we talk about the “Japan” trading session, it does not mean that there are only Japanese trading forex during this time. This session is sometimes called the “Japan Session” or “Tokyo Session” instead of the "Asian Session" because, as we’ve already estimated, the Yen is the third most traded currency, and, as we’ve talked about in the previous chapter – Tokyo is the third largest trading center in the world.

    [​IMG]

    Statistics tell that about 1/5 of all daily transactions happen during Japan’s trading session. Also the Yen takes part in 16-17% of all forex transactions. Sometimes this trading session also called the “Asian Session” for two reasons. First, Tokyo and Japan is an economic center of Asia. Second, not only Japan trades during this time period. A huge volume of transactions comes from Singapore, Malaysia, Hong Kong, China and Australia – the Sidney trading session mostly overlaps with Tokyo’s one.

    The major reason, why we talk about each trading session separately and in detail is the fact that different pairs trade differently during each session. Let’s take a look at trading ranges of different pairs during the Asian session:

    PairAsian session
    EUR/USD75
    GBP/USD90
    USD/JPY55
    AUD/USD80
    NZD/USD63
    USD/CAD54
    USD/CHF66
    EUR/JPY107
    GBP/JPY122
    AUDJPY94
    EUR/GBP80
    EUR/CHF82
    As you can see from the table, such pairs that include the AUD, NZD or JPY are the most actively traded. Here is why:

    - During Asian trading session news from Australia, New Zealand and Japan are released. If your trading plan includes possibility of making trades on news releases, this could be the best time to trade those currencies. Besides, when a new day has begun, Japanese companies start to make business and more and more yen pass from one hand to another;

    - Now China is one of the biggest economies in the world and it has great influence on Tokyo’s trading session. China is one of the world’s largest consumers of resources and goods – so, Japan and Australia heavily depend on Chinese demand, and when some China economy macro data releases – it can lead to large volatility in AUD and JPY pairs.

    All these facts lead us to the conclusion that during the Asian session it is better to trade pairs that include the JPY, AUD and NZD currencies. And statistics confirm this assumption (look in the table again).
     
    #1 Administrator, Mar 23, 2011
    Lasted edited by : Feb 7, 2016
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