If you’re new to forex trading, you may be eager to trade as much as possible, or perhaps you’re trying to figure out a schedule for trading that works around your daily life. For many of us, things slow down on the weekends, making it a good time to pursue extra tasks such as trading. The good news is that the forex market is in fact open 24/7, however, there are some things you need to know before you decide to devote a large amount of time to trading on weekends.
To start, the forex market actually opens at 5 p.m. Sunday evening and closes at 4 p.m. Friday evening. Although this leaves out Friday night, Saturday and most of Sunday, overlapping market sessions and different time zones mean that there is always at least one market open. Market sessions are divided into the following:
- The New York Session (8 a.m. – 5 p.m. CST)
- The Tokyo Session (7 p.m. – 4 a.m. CST)
- The Sydney Session (5 p.m. – 2 a.m. CST)
- The London Session (3 a.m. – 12 p.m. CST)
As you can see, the overlapping market sessions make it possible for traders to enter currency trades at any hour. You’ll always have access to the most traded currency pairs as long as the market is open, but other currencies may not be available 24/7. These are the currencies you can always expect to see available for trading:
- The U.S. Dollar (USD)
- The Euro (EUR)
- The Japanese Yen (JPY)
- The British Pound (GBP)
- The New Zealand Dollar (NZD)
- The Canadian Dollar (CAD)
Did you know that these are the seven most traded currencies in the entire world? You also might be interested to know that spreads for cross pairs involving these currencies are tighter during the busiest market hours. If you trade during these times, you’ll be able to benefit from the tighter spreads while trading highly liquid pairs.
Should You Trade Forex on the Weekends?
Although you can technically trade forex on the weekend thanks to the market’s time schedule, this doesn’t necessarily mean you should do so. Allow us to explain why.
Typically, the busiest trading times occur during the London and New York sessions and one of the best times to trade is when these two sessions overlap, from 8 a.m. to 12 p.m. CST. During this time, the majority of the daily volume is traded and the market is highly liquid. Things also tend to be much more active towards the middle of the week before slowing down on Friday for the upcoming weekend.
Many traders simply choose not to trade on the weekend. This is due in part to lifestyle reasons, as many of these traders are looking to spend time with their families or to kick back and relax as the weekends. Since there aren’t many traders online, the market slows down, and you’ll find a less liquid market with fewer trading opportunities. This is yet another reason why many traders avoid the market on weekends, as it seems less efficient to trade during this time.
If you do choose to trade during the slower times, you’ll still be able to make a profit, so this is a personal choice. You should also know that there are some other times that may be better to avoid, such as when major news releases are expected. Political news or elections, financial news, and other events can really shake up the market and make it harder to predict what will happen, but some traders do thrive in this type of market environment. Another time when it’s better to take the day off is whenever there is a major holiday, as most other traders are doing the same and you won’t really be missing out on much.
The Bottom Line
We covered a few important topics in this article related to trading on the weekend. Here’s a quick summary of the most important things you need to know on the subject:
- Forex is considered to be a 24/7 market because of different time zones and overlapping market sessions. During this time, the seven most popular currencies are always available for trading, but other emerging currencies may be limited at times.
- The best times to trade occur through midweek and when the London and New York sessions overlap. Brokers also offer tighter spreads on popular currencies during the most active times.
- Monday mornings, Friday evenings, and weekends are typically slower and provide fewer trading opportunities, meaning that it is less efficient to trade during these times.
- There are a few other times when you might want to avoid trading, including major holidays and times when important news releases are expected.
Flexible market hours provide traders with several different opportunities for trading and everyone should be able to find trading times that work best with their schedule. It’s also important to keep the best and worst trading times in mind when planning what times you will and will not trade. Paying attention to the best trading times will help ensure that you get the most efficient results with less effort invested, plus you might be able to take advantage of benefits like tighter spreads and more trading opportunities.