Forex market is a decentralized market, meaning that it operates 24 hours a day, 5 days a week across the world. However, just like any other financial market, the forex market has specific hours of operation in different regions of the world, and traders need to be aware of these hours to take advantage of the market’s trading opportunities.
Forex trading hours vary depending on the time zone of the country in which the market is operating. The forex market is open 24 hours a day, starting at 5 pm EST Sunday and ending at 5 pm EST Friday. However, the market does close on weekends, which means that traders cannot trade during Saturdays and Sundays.
In general, the forex market operates in four major sessions, which are the Asian, European, North American and Australian sessions. These sessions overlap at some point, providing traders with the opportunity to trade forex around the clock.
The Asian session is the first forex market to open, starting at 7 pm EST on Sunday and closing at 4 am EST on Monday. This session is dominated by the Japanese yen and the Australian dollar, with the market being relatively slow during this time.
The European session is the most active forex market, with the London session opening at 3 am EST and closing at 12 pm EST. The European session sees the highest trading volume and volatility, with the euro being the most traded currency during this time.
The North American session opens at 8 am EST and closes at 5 pm EST. This session sees high trading volume and volatility, with the US dollar being the most traded currency.
Finally, the Australian session opens at 5 pm EST and closes at 2 am EST. This session is relatively quiet, with the Australian dollar being the most traded currency.
It is worth noting that the forex market’s closing time on Friday varies depending on the time zone. For instance, the forex market closes at 5 pm EST on Friday, which is 10 pm GMT, but it closes at 10 pm EST on Friday, which is 3 am GMT on Saturday.
Traders need to be aware of these closing times as they affect their trading strategies. For instance, traders need to close their positions before the market closes on Friday to avoid the weekend gap risk. The weekend gap risk occurs when the market opens on Monday with a significant price difference from Friday’s closing price, resulting in losses for traders who did not close their positions.
In conclusion, the forex market is a 24-hour market that operates five days a week, with specific sessions for different regions of the world. The market closes on weekends, and traders need to be aware of the closing times to avoid the weekend gap risk. Understanding the forex market’s opening and closing times is essential for traders to take advantage of the market’s trading opportunities.
