The Forex market is open 24 hours a day, 5 days a week (from Sunday 6:00 PM ET until Friday 6:00 PM ET).
What is the Forex market?
The forex market is a global, decentralized, and unregulated market for trading currencies. It is the largest financial market in the world and its participants include individuals, businesses, and governments that trade 24 hours a day. The forex market also facilitates international trade because the dollar has been the predominant trading currency for over 50 years.
The forex market falls into three categories: spot trading, forwards transactions, and swaps transactions. Spot trading involves buying or selling currencies within two days of delivery with an exchange rate set at the time of agreement to buy or sell. Forwards transactions are contracts between two parties to buy or sell a specified amount on a specified date forward for an agreed-upon price. Swaps are contracts involving no money but simply an agreement
Why does the Forex market trade 24 hours a day?
The Forex market is open 24 hours a day because the currency exchange rates are always changing. The exchanges happen in Tokyo, London, New York, Paris, Frankfurt, Sydney and other cities around the world. While the time zones overlap, the generally accepted time zone for each region are as follows:
|New York||8AM - 5PM||1PM - 10PM|
|Tokyo||7PM - 4AM||12AM - 9AM|
|Sydney||5PM - 2AM||10PM - 7AM|
|London||3AM - 12PM||8PM - 5AM|
How does this impact Forex traders?
The Forex market is open 24 hours a day because it never closes. This means there is always an opportunity for traders to make trades. Theoretically, the more opportunities you have to trade, the more successful at trading you should be.
The Forex market is open 24 hours a day because it's always open for trading. Most other markets, like the stock market, are only open when the markets are functioning in their respective countries.