When Does the Forex Market Open and Close?

With an estimated $5.3 trillion exchanged daily, the foreign exchange market is the most liquid financial market in the world. Because forex or fx is an over-the-counter product, there is no central physical exchange where currencies can be traded, as opposed to shares, which are traded on multiple stock exchanges.

The FX market is an interbank market in which large banks serve as market makers and offer their own pricing. Unlike stock market hours, when traders are constrained to a weekday timetable with set hours, there are fewer trading constraints, such as when and where you can trade.

What are the major forex centres?

The key forex centres across the world are London, New York, Tokyo, and Sydney, and the fact that these big centres are located all over the world makes forex a 24-hour market. Because forex is an over-the-counter market, there is no centralized forex exchange. Instead, forex trading is enabled by banks, brokers, and market makers in key forex centres throughout the world.
 

Currency trading hours: the times when the forex market is open

The FX market is open five days a week, 24 hours a day. However, each day is divided into numerous sessions, each of which is open for a specific number of hours based on the geographical region. Our weekday currency market at IG is open from 12 a.m. on Monday to 1 a.m. on Saturday.

While the forex market is often closed on weekends, IG is the only provider that offers weekend trading on the GBP/USD currency pair. This means you’ll never miss a trading opportunity, and you’ll be able to hedge your weekday GBP/USD positions with a weekend trade on the same market.

Our weekend forex trading hours are from 7 a.m. on Saturday until 11:40 p.m. on Sunday (Dubai time). Any positions left open after 11.40pm (Dubai time) on Sunday will be converted to weekday positions when the markets reopen 20 minutes later at 12am (Dubai time).

To trade forex, there are three primary sessions: the Asia-Pacific session, the European session, and the US session. The Asia-Pacific session is the first to begin, with Sydney opening at 12am (Dubai time) and closing at 9am (Dubai time) the following morning. Tokyo, which is also part of the Asia-Pacific session, begins at 3 a.m. (Dubai time) and ends at 12 p.m. (Dubai time).

The next session to begin is Europe, with London, the world’s largest currency center, opening at 11 a.m. (Dubai time) and closing at 7 p.m. (Dubai time). The US session is the last to open and shut, with trading in New York beginning at 3pm (Dubai time) and ending at 12am (Dubai time), when the Sydney session begins.

It’s crucial to know that forex trading hours can change during the months of March, April, October, and November as countries switch to and from daylight savings or summer time on different days. They should also keep in mind that no single forex trading session is open 24 hours a day, but rather that the forex market is active 24 hours a day due to the several trading sessions.

Why are the trading hours of the forex market important?

Although the forex market is open 24 hours a day, the market is more busy during different sessions or when there is a crossover between two sessions in different geographic regions, which means spreads are tighter. However, this increased activity is often limited to currencies found in both locations of a crossover – for example, GBP/USD sees higher trading volume when both the European and US sessions are active between 3pm and 7pm (Dubai time).

The big institutions, such as investment banks, are most active at the start of each trading session, and this is often when significant economic data for that session is issued. The UK, for example, publishes its major data releases at 11.30am (Dubai time), whilst the US publishes its numbers between 2.30pm and 5.30pm (Dubai time).

Because these announcements can cause significant market volatility, every forex trader should be aware of when they are made.

What effect do trading hours have on individual FX pairs?

Overlap will have a greater impact on some currency pairings than others. EUR/USD and GBP/USD, for example, will witness higher activity as New York settles in while London remains fully operational.

A forex pair often has more liquidity when at least one of its markets is active; for example, USD/JPY will be busiest during the Asian or US sessions, but less so during the London or European sessions. EUR/JPY will be more active at the start of the London day, whereas EUR/USD will be less active throughout the Asian session, and so on.

Whichever pair you trade, whether it is one of the largest and busiest or one of the more ‘exotic’ ones, it is critical to first understand what data is being published today, and second, which sessions are likely to be the most volatile. Traders can then choose to trade during volatile or tranquil periods, with both techniques having pros and downsides.

As with so many other aspects of trading, there is no such thing as a “perfect” or “optimal” time to trade forex. However, there will be instances when the market is better than others, or when a specific trading style or currency pair is better suited.
 

When is it advisable to trade forex?

During the week, at least one forex trading session is always open, though there are times when the market is extremely calm and trading volume is low or “thin.”

You should generally avoid trading when there is only one trading session active and instead wait for trading sessions to overlap.

The number of traders actively buying and selling a given currency increases significantly when two main financial centers are open.

The largest trading volume happens when the London and New York trading sessions overlap. These two financial centers account for more than half of all trade volume. The optimal time to trade forex will depend on the currency pair you want to trade.

When the trading sessions of the separate currencies overlap, the majority of the trading activity for a single currency pair occurs.

When both the Sydney and Tokyo sessions are open, for example, the AUD/JPY will see a larger trading volume. Furthermore, while both the London and New York sessions are open, the EUR/USD will see a larger trading volume. Know more أدوات التداول

Although the forex market technically never closes, retail traders can only trade between Sunday and Friday at 5:00 p.m. ET.