How to Develop a Forex Trading Plan for the Asian Market

If you’re interested in trading currency in the global forex market, we can safely say that you’re not alone. After all, this market currently sees an estimated $5.3 traded every single day, while it’s cumulative value is estimated to be in the region of $1.934 quadrillion.

While the market boasts considerable leverage and liquidity, however, it’s also extremely volatile, creating a scenario where you can lose far more than your initial investment in some instances.

There are also a number of different geographical markets that you can target, with the 24-hour foreign exchange divided into three distinct trading sessions. In this post, we’ll look at how you can create a viable plan for the Asian market:

Learn When the Asian Market Runs

Let’s start with the basics; as you’ll need to understand the timings of the Asian market before learning how to profit from this entity.

Unofficially, activity from this part of the world is represented by the Tokyo stock exchange and capital markets, which operates between the hours of midnight and 6am (GMT). However, other leading powers such as Australia, Russia, China and New Zealand also trade widely during the Asian session, creating total opening hours of 11pm and 8am (GMT).

This is an important consideration, as it creates a one-hour crossover with the European market and fundamentally extends the hours during which you can conceive and execute viable trades.

Focus on the Crossover with Other Markets

This single hour represents a great time to trade Asian currencies and assets, primarily because it helps to optimise trading volumes and creates peak levels of volatility.

Given the derivative and margin-based nature of currency, this enables investors to open up a high number of positions simultaneously and hedge against specific pairings to capitalise on market fluctuations.

You can achieve this by leveraging trading platforms such as Tickmill, which offer real-time access to various markets and also enable you to schedule trades at different times.

Much will depend on your precise trading outlook and appetite for risk, of course, but there’s no doubt that targeting this one-hour window during the Asian session will deliver optimal returns over time.

Target the Right Currency Pairings

In order to achieve success during this session, it’s also important that you target specific and relevant currency pairings.

One of the best options in this respect in the USD/JPY pairing, as this boasts high levels of predictability thanks to the asset’s direct links to Japanese commodities. This popular pairing also offers relatively low bid-ask spreads, while its inherent volatility makes it more than possible to generate a significant profit in the right conditions.

Overall, most of the best pairings tend to include the dominant greenback, with the AUD/USD and the USD/RNB also offering significant value during the Asian trading session.

Thanks to the crossover with the European market, you may also want to target pairings such as the GBY/JPY. This can lead to increased volumes and greater volatility, which is tremendous if you have an appetite for risk and want to generate higher profits.