The forex market is a 24-hour global network of traders and institutions that buy and sell currencies. This means that the forex market is always open for trading, except for weekends and some public holidays. However, the forex market does not open and close at the same time worldwide, as different time zones and trading sessions affect the market’s liquidity and volatility.
The forex market is divided into four main trading sessions, each with their own unique characteristics and trading opportunities. These sessions are:
1. Sydney session – Opens at 10:00 PM GMT (5:00 PM EST) and closes at 7:00 AM GMT (2:00 AM EST)
2. Tokyo session – Opens at 12:00 AM GMT (7:00 PM EST) and closes at 9:00 AM GMT (4:00 AM EST)
3. London session – Opens at 8:00 AM GMT (3:00 AM EST) and closes at 5:00 PM GMT (12:00 PM EST)
4. New York session – Opens at 1:00 PM GMT (8:00 AM EST) and closes at 10:00 PM GMT (5:00 PM EST)
The forex market opens on Sunday at 10:00 PM GMT (5:00 PM EST) with the Sydney session, and closes on Friday at 10:00 PM GMT (5:00 PM EST) with the New York session. However, there are some exceptions to this rule, such as when the market is closed for public holidays or when there are unexpected events that can affect the market’s liquidity and volatility.
Each trading session has its own characteristics, as they overlap with each other and affect the market’s liquidity and volatility. For example, the Sydney and Tokyo sessions are known for their lower volatility and lower trading volumes, as they are the earliest sessions and many traders have not yet entered the market. On the other hand, the London and New York sessions are known for their higher volatility and higher trading volumes, as they overlap with each other and many traders are active in the market.
When the two sessions are overlapping, it creates a high liquidity and volatility in the market which provides a lot of trading opportunities. The London and New York session overlap for approximately four hours, from 1:00 PM GMT (8:00 AM EST) to 5:00 PM GMT (12:00 PM EST), which is known as the “power hour” in the forex market. This is when the market is the busiest and most active, and many traders take advantage of this time to make profits.
In conclusion, the forex market is open 24 hours a day, five days a week, except for weekends and public holidays. However, the market does not open and close at the same time worldwide, as different time zones and trading sessions affect the market’s liquidity and volatility. Traders should be aware of the different trading sessions and their characteristics, in order to take advantage of the market’s trading opportunities and avoid trading during low liquidity and volatility times.
