Asian Session Forex
Time of day in Forex Trading
One of the most important Forex Market is that it is a 24-hour market.
Trade does not stop, except weekends of course. As the sun moves from one part to another of the world, so does the action in the forex market.
This is a key factor to consider in designing a forex trading system or method. Depending on the time of day you are trading in the market behaves differently.
Let's look at some charts to help you better understand this issue.
The following is a chart of five minutes of the bar EUR / USD. What is the dominant feature in this picture?
*** table ***
It is not difficult to detect. Here we can see that the couple is simply moving sideways thus forming a range. More importantly, you can clearly see that the couple does not move more than 7-8 pips from side to side. Therefore, not only the couple move in a range,
but a narrow range.
Why is this? Why is the EUR / USD moves in a narrow range? Very simple question for a very simple answer: This is because the above table represent the market action happened in the Asian session. It is not a written rule in stone, but as forex traders know that the Asian session low volatility means, and sometimes cash. The natural result is that the market tends to range at this meeting.
Now take a look at the following table and recognize the difference between the two:
*** table ***
As we can see here is not clear that volatility occur. The movements of the couple about 1.2990 to 1.2927 as shown in Section A.
This is more than a swing pip 60s. Point B shows a new and 25 pip opposite trend. Point C is the market action that occurred several hours earlier than shown in the chart first.
So why is the market action in A + B so different from the market action at point C? Just because A + B was produced during the session U.S. which is considered a highly volatile session, especially if there are announcements of important news, such as government reports. Again, the point C was at the end of U.S. session and by the onset of the Asian session.
What I wanted to achieve in this article is simple. When designing a trading system currency, especially a system of Daily Forex trading, markets take into account the different characteristics over the 24 day trading hours. For example, try a Day Forex trading systems in the U.S. EU or sessions that focus on capturing changes in the Asian session try to use techniques trading range.
Remember, be a successful forex trader not only requires a simple but understanding of many contributors. The time of day is one of these very important factors.
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FOREX VIDEO | NEW YORK SESSION REVIEW | March 4, 2009