The Ultimate Guide to Forex Market Hours: When Does it Close on Friday?
The forex market is known for its non-stop trading hours, allowing traders from all around the world to participate at any time of the day or night. However, even the forex market has its limits when it comes to trading hours. In this article, we will explore the forex market hours, with a specific focus on when it closes on Fridays.
Forex Market Hours: A Brief Overview
Before diving into the details of Friday’s closing time, let’s first understand the forex market hours in general. Unlike traditional stock markets that have fixed operating hours, the forex market operates 24 hours a day, five days a week. This means that trading is possible from Monday morning in Asia until Friday evening in the United States.
The reason behind this continuous trading is the global nature of the forex market. As different countries around the world open and close their financial markets, liquidity is constantly flowing in and out of the market. This allows traders to take advantage of opportunities at any time, regardless of their geographical location.
The Major Forex Trading Sessions
To better understand when the forex market closes on Friday, it is important to know the major trading sessions. These sessions are based on the opening and closing times of the financial markets in different regions.
1. Asian session: This session starts on Sunday evening (Eastern Time) and ends in the early morning hours of Monday. The major financial centers in this session are Tokyo, Hong Kong, and Singapore.
2. European session: This session starts with the opening of the Frankfurt market at 2:00 AM (Eastern Time) and lasts until the closing of the London market at 12:00 PM (Eastern Time). The European session is known for its high liquidity and volatility.
3. North American session: This session starts with the opening of the New York market at 8:00 AM (Eastern Time) and ends with the closing of the US market at 5:00 PM (Eastern Time). The North American session is the busiest and most active session, as it overlaps with the European session.
When Does the Forex Market Close on Friday?
Now that we have a clear understanding of the major trading sessions, let’s address the question at hand: when does the forex market close on Friday?
The forex market officially closes on Friday at 5:00 PM (Eastern Time) with the closing of the US market. This marks the end of the trading week for forex traders. However, it is important to note that even though the market closes on Friday, it does not mean that trading stops completely.
While the official closing time is at 5:00 PM, there are still opportunities for trading during the weekend. This is because the forex market operates in different time zones, and when it is Friday evening in the United States, it is already Saturday morning in Asia. As a result, some brokers offer weekend trading, allowing traders to take advantage of news events or market developments that occur during this time.
It is crucial to mention that weekend trading comes with its own risks. The liquidity during the weekend is significantly lower compared to weekdays, which can result in wider spreads and increased slippage. Additionally, unexpected market gaps can occur when the market reopens on Monday, potentially causing significant losses if trades are left open.
Conclusion
In conclusion, the forex market operates 24 hours a day, five days a week, allowing traders to participate at any time. However, it officially closes on Friday at 5:00 PM (Eastern Time) with the closing of the US market. While trading opportunities are available during the weekend, it is important to be aware of the risks associated with weekend trading, such as lower liquidity and potential market gaps. Traders should carefully consider these factors before deciding to engage in trading activities outside of regular market hours.
