The Asian session is renowned for being the slowest and toughest session for forex traders. With low volume and higher spreads, to be successful in trading the Asian session as a forex trader you need to know which pairs to execute trades on. So, which forex pairs are best to trade with, during the Asian hours?
During the Asian session, the best forex pairs to trade are any JPY or AUD pairs. Any USD, EUR or GBP major pairs are going to have higher spreads and lower volume, making them harder to trade. JPY and AUD pairs will have lower spreads and higher volume, making them possible to trade during the Asian hours.
Choosing A Forex Pair During The Asian Session
Typically, most forex traders stay away from the Asian session. This is due to the lower volume, unpredictable moves and higher spreads. However, if you are choosing to trade the session you would need to be sure of which forex pairs you’re taking trades on.
With European firms and US firms being shut for the night, you want to be avoiding the majority of USD, EUR and GBP pairs. With the lack of liquidity and volume on those currencies, there will be a lack of opportunities and typically much higher spreads. Most of the time, these currencies won’t be moving much at all so price action will be a lot harder for traders to read.
With volume picking up in Sydney and Tokyo, focusing on JPY and AUD pairs is going to be the best idea. These pairs are going to have the highest liquidity and are more likely to produce some high quality trades. The volume on NZD pairs is usually fairly low, so I wouldn’t focus on them.
In short, during the Asian forex session you’ll want to focus on pairs like USDJPY, AUDJPY, AUDNZD, GBPJPY. You’ll want to be avoiding forex pairs like EURCHF, EURGBP, GBPCHF.
When Is The Asian Session?
The Asian trading hours are when the Asian world is in full swing. Europe and the US aren’t operating at the time, with most European traders being asleep during most of the session. The Asian session and Sydney session overlap, with the Sydney trading session just starting 2 hours before the Tokyo session. In the last 1 hour of the Tokyo session, the London session starts shaping up.
Unlike every other session, the end of the Tokyo session is when the volume is actually the highest. Typically the Sydney trading hours have very low volume, so it may be beneficial for traders to focus more on the Tokyo/London crossover, rather than just focusing on the Tokyo session open.
Should You Trade Any Forex Pair During The Asian Trading Hours?
While it’s a great idea to figure out which forex pair would be best to trade during the Asian trading hours, it’s also worth thinking about other trading sessions. Forex is a very liquid market and it relies on having a huge amount of volume flowing through the decentralised markets. The Asian trading session has the lowest trading volume out of all 3 of the main sessions in the day.
For more information on why the session has the lowest volume, I’d recommend reading this Forex Factory thread. In short, the volume in the Asian session is lower because all of the business and funds in London and New York are shut. They are typically the areas pushing most volume and money through the markets, so this definitely slows the markets down.
With lower volume, the Asian session has higher spreads, slower moves and typically less predictable price action. If you’re a price action trader, I’d definitely think about ignoring the session as a whole. I focus more on algo trading now, so I am happy to have trades opening through all sessions but when I was purely trading price action and fundamentals, I would always avoid trading the Asian sessions.
With so much volume in the London and New York sessions, you can certainly miss the Asian session without costing yourself anything, in the way of missed opportunities. Certainly something to think about!
In Summary – Which Forex Pair Is Best To Trade During Asian Session?
In conclusion, due to the lack of volume and high quality opportunities I would personally avoid trading forex pairs during the asian session. If you are set on trying to capitalise on the trading hours, focusing on pairs like AUD and JPY will be the best idea. Avoiding currencies like EUR, CHF and GBP will be a good idea as the volume is going to be extremely low.
If you have any experience trading the asian session please do let us know in the comments down below, I’d love to hear your results and I personally avoid the session.