The Forex market, unlike other financial markets is a 24 hour affair. While this provides a great opportunity for traders to take advantage of the world market, it does have its drawbacks.
This brings me to a very common misconception in the Forex world — the idea that the market closes on weekends. In truth, the Forex market never closes. The only thing that closes is the ability for retail traders to participate. What is a retail trader, you ask?
So unless you are an institutional trader, you are a retail trader. So although the ability for retail traders to participate is halted over the weekends, the Forex market as a currency exchange is alive and well. For now just know that the market never closes due to the needs of international trade, as well as the needs of central banks and global industries to conduct business. Because this is a 24 hour market, there is always at least one active trading session. There are even times when these sessions overlap.
Wherever the sun is shining, the Forex market is open. As you can see from the chart above, there are several market sessions which overlap. This is when liquidity is at its highest as many Forex market participants prefer trading during this time. One of the most common questions among Forex traders is, when is the best time to trade?
For example, if you spot a bullish pin bar on the daily time frame, you would simply set your pending order and let the market decide what becomes of it.
See my lesson on the best time frame for trading Forex for more information. Like most things, there are advantages and disadvantages to the Forex market being a 24 hour market. I will note, however, that the disadvantages typically reign true with those just starting out. In fact, I feel confident in saying that the disadvantages below are what make the Forex market one of the more challenging markets to conquer as a beginning trader.
Many new traders find it hard to take breaks from the market because they feel the need to monitor their positions at all times. This is one of the more destructive habits of new traders and is enabled by the fact that the Forex market never closes. The good news is that these disadvantages are easily cured by a well-structured Forex trading course , discipline and no small amount of practice.
I hope this lesson has shed some light on the subject of Forex market hours as well as the various market sessions that make up a 24 hour period. Please log in again. The login page will open in a new window. After logging in you can close it and return to this page. Forex Market Sessions Because this is a 24 hour market, there is always at least one active trading session.
Here is a breakdown of the chart above in Eastern Standard Time: New York opens at 8: Which Session is the Best to Trade? Advantages and Disadvantages Like most things, there are advantages and disadvantages to the Forex market being a 24 hour market. Summary I hope this lesson has shed some light on the subject of Forex market hours as well as the various market sessions that make up a 24 hour period. Here are a few key points to keep in mind: Session expired Please log in again.More...