Forex Market Hours 24/7?

01 Mar 2017

The Forex market is a decentralised global market. The market is online and networked and its participants connect to each other electronically, from nearly all corners of the globe. Unlike many other financial markets there is no central exchange, trading floor or clearing house, or indeed national boundaries to consider. This globalisation and interconnectedness help to make Forex the most active financial market in the world, when measured in terms of daily turnover, or value traded if you prefer. Which totals trillions of US dollars per day. These high turnover figures are achieved because of another of the Forex markets competitives advantages, its trading hours.

24 hours per day

The Forex markets operates 24 hours per day, 5 days a week. Trading commences late on a Sunday evening UK time, which is early morning in Asia and runs through until the end of the business day in New York, on Friday evening. During that time traders can access the Forex market from anywhere they can get a stable, high speed internet connection. They are able to place orders, open or close positions, create charts and monitor their accounts.

Specific sessions

The Forex market moves around the globe as the trading day unfolds and there are three distinct sessions that we need to be aware of. These are Asian, European/UK and US/New York. As noted above the trading day starts in Asia with traders in leading financial centres that include Tokyo, Hong Kong, Singapore and Shanghai amongst others. These Asian centers are many hours ahead of their European counterparts. But as their business day heads towards the close in Asia, the European markets and most importantly London are opening up. London is the main hub in the global foreign exchange markets, straddling as it does the Asian and American time zones. Many banks from around the world have a significant presence in London, which offers them access to cutting edge communications technology, a high skilled and knowledgeable workforce, alongside a robust regulatory and legal framework. According to BIS (Bank for International Settlements) survey data London accounts for more than 40% of Global Forex trading (see here). Around midday in London, early birds in New York and elsewhere on the US east coast arrive at their desk, or login to their trading platforms and start to interact with their London and European based peers. And by 5pm UK time many European trading desks have finished for the day and the business moves across the Atlantic to the “big apple”. As the trading day in New York ends financial centres in New Zealand, Australia and those in Asia are coming to life once more and so the cycle begins all over again. That process is repeated throughout the week until books are closed Friday evening in New York and the market takes the weekend off.

Things to be aware off

Whilst Forex market hours mean you can trade around the globe 24 hours a day. You do need to be aware of the fact that currencies tend to have a regional bias. That is to say that the bulk of the trade in Asian pairs and crosses will take place in the Asian session (note though that USD JPY is an exception, often being more active in the European session) The same is true for European names which favour the London session. Whilst those currencies originating from the Americas will do most of their trade in New York session. Liquidity in the major currency pairs is relatively constant but markets can be thinner and volumes lower the further you move away from the home session. Such that there will likely be less interest in AUD JPY (Australian Dollar Japanese Yen) in the New York session than there would be when Tokyo and Sydney are open for business. On top of which business is usually concentrated at the start and end of the business day with a noticeable lull over the Lunchtime period.

Quieter ahead of data

Its also true to say that markets tend to be less active in the immediate run up to major data releases or events. Such as US unemployment numbers or a Bank of Japan interest rate meeting. Ahead of these type of events mary market participants move to side lines and markets can become thinner or more volatile as a result. Once the data is released and it has been digested then participants and liquidity return.

More opportunity to trade

The 24/5 nature of the Forex markets means that retail investors and those that want to trade in addition to a full time job, have a greater opportunity to do so. For example if you live in the UK and are home from work and settled by soon after 6pm. Then you have several hours of the US session remaining. In which to trade or research and study the market. Or if you work in the evening and don't get home until midnight UK time. You can trade in the Asian session, before heading off to bed if you so wish. That trading opportunity is not available in other markets. For instance the trading hours of the London Stock Exchange are from 8.00 am until 16.30 pm Monday to Friday. What's more the fact that Forex trading takes place on line means that you can in effect trade from anywhere you can connect to the internet. Our dedicated trading software Blackwell Global Trader MT4 offers both Android and iOS versions specifically designed for mobile devices and tablets. If you want you discover more about Forex market hours and how currencies trade across various sessions. Then why not apply for an trading account and download our free MT4 trading platform to see for yourself.

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