The Impact Of Forex Market Clock
The Forex markets 24hrs a day, it open between Mondays to Friday and closes only on weekends, at least one of the four major Forex markets is open for business, and three times during each 24-hour period, two overlap. This creates volatility and liquidity, the latter resulting in tighter spreads and lower trading fees and costs. There are Brokers that also offer synthetic indices that has an exception which runs even through the weekend.
Four Major Trading Patterns
- London opens at 08:00 UCT (03:00 EST) and closes at 17:00 UCT (12:00 EST)
- New York opens at 13:00 UCT (08:00 EST) and closes at 22:00 UCT (17:00 EST)
- Sydney opens at 22:00 UCT (17:00 EST) and closes at 07:00 UCT (02:00 EST)
- Tokyo opens at 24:00 UCT (19:00 EST) and closes at 09:00 UCT (04:00 EST)
Best times to trade
- The first and last hour of each of the major Forex market session
- They present more liquidity, tighter spreads on currency pairs, and lower trading costs.
- Each trading session overlap, where Forex traders get the best trading conditions.
- The entire London trading session, as it represents 43% of all trading activity.
Times not advisable for trade
- The four major trading sessions are on an unofficial two-hour lunch break around noon local time. The lack of liquidity creates wider spreads, and any trends established remain prone to reversals.
- It is thirty minutes before or after a major news release. These periods tend to be unpredictable and can create false breakouts/breakdowns. News trading is popular but usually too risky to be fruitful, so using a detailed economic calendar can help navigate this trading trap
Why cant they operate on weekends
Unlike equity or bond markets, the Forex market is necessary for around-the-clock trading. Imagine companies, governments, and even individuals having to wait for the Forex market to open for business. It would disrupt the global supply chain, harm the economy, and make day-to-day necessities impossible.
Take Weekend times to:
- Reading bank sheets and understanding what is being spoken about,
- Checking the economic calendar and highlighting any major events,
- Reviewing key charts and highlighting key levels and plans,
- Reviewing the performance from the past week