Trading Strategies for the Asian Forex
MAR 9, 2021
The Asian forex market has become a lucrative avenue for beginners and part-time traders. It runs for 24 hours, five days a week, and is constantly in fluctuation, providing traders an opportunity to make quick profits from any part of the globe.
However, it’s easier said than done. Understanding the Forex market and implementing the right strategy is the key to success. Traders who take decisions based on emotions rather than executing calculated strategies end up losing money. Let’s find out more!
Understanding the Asian Forex Market trends
Asian Forex market is heavily influenced by central banks and the Japanese commercial market, mainly exports. Liquidity can often be thin. Most economic news pertinent to the Asian region is release early morning, making it the busiest trading time.
Most activity takes place in the morning, with Tokyo trading sessions leading the way. It typically sets the tone for the following sessions. However, investors must keep a close eye on the preceding sessions to make informed trade choices.
Here are some trading strategies for the Asian Forex market:
The Tokyo session holds the key
During the Asian Forex session, volatility levels are comparatively lower, affecting profit and loss opportunities. The popular traded pair is AUD/JPY, but the NZL/JPY is also traded in the Tokyo session. Volatility levels are at the lowest before 00:00 GMT.
The U.S. traders jump into the market at 12:00 GMT and operate until 21:00 GMT, followed by Australian traders. However, the latter doesn’t bring a lot of movement in the market. However, economic changes can still influence the trades substantially.
To leverage the Tokyo session, you must wait for a consolidation period in which the market pause. It will give you an excellent window of opportunity to evaluate the market and make informed choices about your larger positions.
Stop-loss orders to mitigate losses
A great strategy for beginners, as well as seasoned traders operating in the Asian Forex market, is to leverage stop-loss orders. It’s a proven way to book profits and minimize losses. When the market takes a downswing, your investment will remain protected.
For instance, if you purchase AUD/JPY at 1.0500 and the prices increase at a future date to 1.1500, you can move the stop-loss order up to 1.1100 to safeguard your profits and prevent sustaining a loss of the subsequent adverse changes in the market.
Take fewer positions and focus on long-term trends
If you want to find success Asian Forex market, it’s necessary to do your homework and obtain a good understanding of drivers that influence the value of the currency pairs. You must narrow down specific currency pairs, take few positions, and hold them.
Meanwhile, keep a tab on the long-term trends rather than on daily charts, which may not give you the true picture. It’s a prudent strategy that will pay off long-term dividends and maximize your earning potential over time.
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