Can You Trade 24/7 In The Forex Market?
It would be easy to make the assumption that you could trade 24/7 in the Forex market with all the different time zones and online accessibility. But in reality there are some closing times you need to know.
It would be easy to make the assumption that you could trade 24/7 in the Forex market with all the different time zones and online accessibility. But, don’t get carried away with that thought, because the Forex market does actually shut down briefly at weekends.
The reality is, that actual Forex trading hours start in Sydney, Australia on a Monday morning and go through until Friday afternoon in New York. However, during that time frame you will find the market will be trading anywhere round the world at any time of the day or night. If we wanted to be really specific, we could say the Forex market actually trades twenty four hours a day, five days a week, to allow for the weekend closure.
Pay attention to time zones and currency trading hours
It’s a good idea when you first start trading, to familiarise yourself with the different time zones of the respective countries you intend to trade with or in. The simplest way to do this is to understand the UTC, which means Universal Coordinated Time, previously known as Greenwich Mean Time. If you think of UTC (which is based on the standard winter time in Greenwich, London) as being the starting point because it is based at zero degrees longitude, then just add or subtract the relative hours of the country you need to know about.
It may sound a bit complex until you get used to it, but if you try and remember the core Forex market trading hours are 22.00 Sunday UTC until 22.00 Friday UTC. This simply means 10 pm to 10 pm in the UK.
Australia is 10 hours in front of the UK whilst New York is 5 hours behind, so you will either add or subtract the hours to the base UTC starting point to work out the time of the country you are interested in. Obviously trying to remember all of the different times becomes confusing, but there are a couple of simple options you can use.
There are a number of websites that can tell you the current time for any country, plus you can get software for your desktop that display clocks with the times of various countries, so you can see at a glance the time you are interested in.
Summer daylight savings in the different countries can add to the confusion, particularly if you consider that Australia is in a different hemisphere, consequently they are enjoying their summer whilst many other countries are in the midst of winter. But if you use the desktop software or check the time zone websites, they are adjusted accordingly to the current time of the country you are checking.
Just to give you an idea of time differences between some countries: The trading hours for the Forex market are:
- London: 8 am to 5 pm UTC
- New York: 1 pm to 10 pm UTC
- Sydney: 10 pm to 7 am UTC
- Tokyo: 12 midnight to 9 am UTC
Now, whilst these trading times cover 24 hours, this doesn’t necessarily mean the trading is profitable during all of this period. Shortly after the opening of a major market prices can be unpredictable, and rise or fall rapidly, making them somewhat volatile. Some of the more experienced traders will often stay out of a Forex market for about an hour, until the financial market in a particular city has woken up properly.
You will find that the most commonly traded currency is the US dollar, in fact 2.5 times more used than the euro, which is the next closest. Consequently, any events occurring in the USA tend to have greater impact on financial markets than those of other countries. There is a tendency for the New York Forex market to start slowing down around 8 pm UTC, indicating if you are trading in US dollar pairs, it could be a good idea to stop for the day.
Getting to know a few tips like the one above, can make a big difference as to how well you manage your Forex market account, so it’s well worth acquiring that bit of extra knowledge about the country you are dealing with.
Related posts:
- Are You Confused About Forex FX?
- Forex Exchange Rates: Market Psychology and Market Manipulation
- Currency Trading Hours
- The Forex Market Trade: The Pitfalls of Indicators
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