This is How the Forex Market Trades 24 Hours a Day and What That Means For You

While markets such as the stock exchange only trade during business hours, the Forex market is open 24 hours a day. From Sunday at 10pm GMT to Friday at 10pm GMT, the Forex market is open to trade. We explain how it is possible to have 24 hour Forex trading, and what that means for you.

Time zones
The reason that Forex can be traded 24/5 is that it is a truly global market. Currencies are being traded internationally, and there are traders awake during daylight hours across the different time zones. Since currencies are in such high demand, there is always activity, and thus it is always possible to trade.

Who is trading?
Money makes the world go round, and in international trade, that means currency is always needed. Central banks and worldwide businesses constantly demand currency, so from Monday morning in New Zealand, trade is always possible. When the New Zealand business day ends, the business day elsewhere begins. Since it takes place in a virtual environment, i.e. you don’t need to be anywhere but at your computer to trade, no physical location needs to be open for business.

Does that mean I need to trade 24 hours a day?
Trading should be done strategically, and that requires you to be at your best. If you’re tired from staying up the whole night trading, you’re going to make mistakes. But even if you could trade all day, depending on the currency pair, there’ll be significant lulls in the market. The market gets active when the London session opens, and is most active when the London and New York sessions overlap. Other times, there might be hardly any activity out there.

Does trading happen on holidays?
There are public/bank holidays around the world at different times. Trading obviously does not stop for most of them. The general rule is that trading stops for global holidays, when most of the major hubs are offline. Some countries will go offline during important holidays in their location, but the rest of the world will go on trading as usual.

When should I trade?
You should trade whenever you feel it’s appropriate. This should be according to your trading strategy, your location, your state of mind, and any other factors relevant to you.  If you’re a beginner, the benefit of 24/5 trading is that you can start at any moment. That does not, however, mean you should start at any moment. Do your research, be responsible and, most importantly, do according to your financial and lifestyle circumstances.

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