The Forex Market
In the forex market, global currencies are traded at all times of the day. The forex market is highly liquid, and the increased availability of advanced technology and information processing has only increased the number of participants and the volume of trades.
The market is open 24 hours a day, starting from 5 PM EST on Sunday until 5 PM EST on Friday. Traders are able to trade when the market moves up, as well as when the market moves down. Therefore, it is essential for traders to know when is the best time to trade.
When Forex Market Closes ?
So, exactly when does the forex market closes ? Well, the U.S. forex market closes on Friday at 5 PM EST and opens on Sunday 5 PM EST. Although the market is only closed to retail traders, forex trading takes place over the weekend through central banks and other organizations. Therefore, there is often a difference in price between Friday’s close and Sunday’s opening. This difference is known as a gap.
Traders who do not want to expose their position to the risk of gapping will close their position on Friday evening or place stops and limits to manage this risk.
In certain countries where there is market tension, a bank could go bust in the space of a weekend. This could mean that your position will change dramatically by the time the market opens again on Sunday.
Non-stop Trading
Although markets in many foreign countries are closed when North American markets are open, trading on foreign currencies still takes place. While the majority of trading on a particular currency occurs when its main market is open, many other banks around the world hold foreign currencies enabling them to be traded at times when the main market is closed. For example, the North American markets are open when the Japanese markets are closed, but North American traders are still able to buy and sell Japanese yen through their brokerages and banks. However, the market for Japanese yen is more liquid at times when the Japanese market is open.
Trading sessions according to EST (Eastern Standard Time):
| Region | City | Open (EST) | Close (EST) |
| Europe | London
|
3:00 AM | 12:00 NOON |
| Frankfurt
|
2:00 AM | 11:00 AM | |
| America | New York
|
8:00 AM | 5:00 PM |
| Chicago
|
9:00 AM | 6:00 PM | |
| Asia | Tokyo
|
7:00 PM | 4:00 AM |
| Hong Kong
|
8:00 PM | 5:00 AM | |
| Pacific | Sydney
|
5:00 PM | 2:00 AM |
| Wellington
|
5:00 PM | 1:00 AM |
Drawbacks to Trading When a Currency’s Market Is Closed
Some investors would not recommend trading when a currency’s market is closed. At market close, a number of trading positions are being closed, which can create volatility in the currency markets and cause prices to move erratically. The same can be the case when markets open. At this time, traders are opening positions perhaps because they don’t want to hold them over the weekend. Holding trades over a weekend is not recommended unless your method as a forex trader is to follow a long-term strategy, which incorporates holding trades for weeks or months.
