The foreign exchange market, or forex, is the largest financial market in the world. It operates 24 hours a day, five days a week, with trading sessions starting on Monday morning in Asia and ending on Friday evening in New York. However, not all forex trading hours are created equal, and there are certain times of the day and week when the market is more active and volatile than others. In this article, we will explore when forex closes on Friday and what it means for traders.
Forex Trading Hours
Before we dive into the specifics of when forex closes on Friday, let’s first take a look at the general trading hours for the forex market. As mentioned, the market is open 24 hours a day, five days a week, from Monday to Friday. However, it is not always equally active throughout the day.
The forex market is divided into four major trading sessions: the Sydney session, the Tokyo session, the London session, and the New York session. Each session has its own unique characteristics and trading hours, and they overlap with each other to create periods of increased trading activity, which are often referred to as “trading sessions.
The Sydney session, which starts at 10 PM GMT on Sunday and ends at 7 AM GMT on Monday, is the least active of the four sessions. It is followed by the Tokyo session, which starts at midnight GMT and ends at 9 AM GMT. The London session, which is considered the most important session, starts at 8 AM GMT and ends at 5 PM GMT. Finally, the New York session, which is also known as the North American session, starts at 1 PM GMT and ends at 10 PM GMT.
When Does Forex Close on Friday?
Now that we have a basic understanding of the forex trading hours, let’s answer the question of when forex closes on Friday. The short answer is that it depends on where you are located and what time zone you are in.
Since the forex market operates 24 hours a day, it technically never closes. However, there are certain periods of time during which trading activity decreases significantly, and these are often referred to as “market closes.”
In general, the forex market closes at 10 PM GMT on Friday and reopens at 10 PM GMT on Sunday. This means that there is a 48-hour period during which the market is closed to traders. However, this does not mean that all forex trading stops during this time.
There are still some trading opportunities available to traders during the weekend, especially for those who trade cryptocurrencies or other assets that are not tied to traditional markets. Additionally, there are some forex brokers that offer weekend trading hours, which allows traders to place trades during the off-hours.
Why Does Forex Close on Friday?
The reason why forex closes on Friday is mainly due to the fact that the market operates on a global scale. Since there are different time zones around the world, it is necessary to have a period of time when all market participants are offline, so that market makers and brokers can perform maintenance and updates on their systems.
Additionally, there are some economic events and news releases that are scheduled for weekends, such as the release of economic data from China or Japan, which can cause significant market movements. Therefore, it is important for traders to be aware of these events and adjust their trading strategies accordingly.
Conclusion
In conclusion, the forex market operates 24 hours a day, five days a week, and closes at 10 PM GMT on Friday. While there are still some trading opportunities available to traders during the weekend, the market is generally closed to most participants during this time. Understanding the forex trading hours and when the market closes can help traders plan their trading strategies and avoid unnecessary risks.
