The global forex market is a highly lucrative financial entity and one that’s worth a staggering $1.934 quadrillion.
The Asian market is particularly popular, thanks to the sheer range of currencies in demand during this time and the one-hour crossover that exists with the beginning of the European market.
But is now the right time to be investing in the forex market in Asia? Here are some of the key considerations to keep in mind:
The Performance of the Asian Market
As we’ve already said; a number of prominent currencies come out to play during the Asian trading session, including the Japanese Yen, the Australian Dollar and the Russian Ruble.
Interestingly, this market is also home to a number of prosperous currencies, including the Hong Kong dollar. This has seen considerable growth in the absence of quantitative easing measures following the Covid-19 outbreak, while the Hong Kong Monetary Authority (HKMA) recently sold $1.55 billion of the currency amid rising international demand.
With nations such as Taiwan also managing to avoid the worst impact of coronavirus, there are several Asian currencies that have enjoyed marked growth of late and continue to rise against major assets such as the US Dollar.
Technology and Accessibility
Modern technology also provides an interesting consideration, as sustained advancement and the rise of online brokerages has made the forex market (and entities such as the Asian trading session) more accessible than ever before.
Not only this; but it has also increased the ease with which traders can hone their strategies and achieve sustainable profits, and there are several ways in which this manifests itself online.
For example, most reputable brokers allow traders to open a demo account when they sign up with the platform. This essentially provides you with access to a simulated, real-time marketplace, and one that enables you to turn your foundation of theoretical knowledge into measured, practical experience.
Striking the Balance Between Risk and Reward
According to theory, the optimal time to trade forex is when your chosen market is at its most active levels (or more specifically when the trading spreads).
To this end, the busiest trading period occurs during the four-hour crossover between the North American and European markets, where volumes begin to spike and volatility can tick up incrementally.
There are exceptions to this rule; however, not least because expected trading volumes are based on the assumption that no major news developments come to light.
This means that geopolitically volatile areas (such as Asia-Pacific) may also experience significant spikes in volume, creating additional opportunities for traders across the board.
It’s also important to note that inflated volumes and market volatility can lead to significant losses and well as gains, so you should strive to strike the ideal balance between risk and reward by utilising tools such as stop losses to proactively manage risk.