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The foreign exchange market is open for trading 24 hours per day for 5.5 days out of the week, making it the only truly global marketplace that does not close while any major stock exchange around the world is open. Trading activity begins when the stock market opens in Tokyo at 7PM Eastern time, which is Monday morning in Sydney and Tokyo, and trading activity generally ceases at 5PM Eastern time when the futures market closes in New York. Some of the biggest market moves occur when the stock market is open in London, which is why London is generally referred to as the foreign exchange capital of the world. For many forex traders, their favorite time to trade any of the major currency pairs is when there are two major markets that are open simultaneously, such as the first few hours after the New York Stock Exchange opens and the markets in London are still open but are getting ready to close. These overlapping time periods where more than one major financial center at a time is open for trading tend to be the highest volume times of the trading day, and it also tends to be the time when liquidity is the highest. Consequently, there are forex traders who choose that they only want to trade during these periods of time . Any major fundamental news or indicators that might be released during this market overlap time can move the market several hundred pips, since this is the peak time with the most active traders. All the major stock markets around the world are closed on the weekends, and generally this tends to be a quiet time for the foreign exchange market because there is very little trading activity taking place. This does not necessarily mean that there is zero market liquidity, but it does mean that the market movements that occur are not nearly as significant as they are during open market hours on the weekdays. For the most part you should still be able to open and close trading positions even with minimal market volume, but for most trading strategies there will not be any trading signals that show clear entry and exit points during this time since the market will be moving sideways. When the New York Stock Exchange closes on Friday evening this signals the end of the global trading week, which will resume again when the financial markets open in Sydney and Tokyo early the following Monday morning. Algorithmic forex trading is one of the opportunites today that can allow retail traders working from home to have access to institutional level trading tools when trading the forex interbank market.
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Foreign Exchange Market, Forex, Forex Market Hours, Forex Trading, Global Currency Market, Global Economy, London,
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