Tokyo Foreign Exchange Market

The Tokyo foreign exchange market represents one of the major trading sessions during the course of a day. Here's what to expect when trading in this market.

When it Occurs

If you're looking at the various foreign currency exchange locations in the market, you'll notice that they all trade during different times of the day. This is because the Forex market is a 24 hour market and they all are located in different time zones.

The Forex trading times for each time zone are slightly different.

In Tokyo, the Forex market hours are from 11:00 PM to 7:00 AM GMT. This means that if you're in the Eastern Time zone, you can expect the Tokyo market to trade from 6:00 PM to 2:00 AM. If you're the type of trader that works a full-time job and then comes home and trades, this is most likely the biggest market that you will be involved with.

What to Expect

If you plan on trading during this session, you should know what to expect. During the Asian session (as it's called), you should typically expect more involvement with the Japanese Yen currency. This is somewhat obvious, because many of the people trading in Japan would have a slight bias towards the currency. This does not mean that they trade nothing else, but the Yen is a bit more popular during this session.

This means that the volatility and movement of any currency pairs that include the Yen are a bit more than normal. They also still trade a lot of pairs that include the United States Dollar.

Scalping

A lot of Forex software programs use a scalping strategy that trades shortly before the Asian session. This is because the market is kind of flat during this time. Once the Asian session kicks in, the trading picks up and the market starts to move. After the US session closes down about 4:00 ET, the market is kind of dead for a little bit before the Asian session. This means that you can take advantage of the slow down and score a few pips here and there. FAP Turbo is one example of a software program that uses this strategy. When using this strategy, you must pay attention to the foreign exchange spreads as they can change quickly with a lack of volume in the market.

Considerations

If you're planning on trading in the Tokyo market, you should try it out on demo for a while to see how it flows. The market has its own tendencies when compared with other sessions. For many people, this session represents a good opportunity because it is convenient for their schedule.


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