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Check How the forex markets work 24 hours a day
Unlike the stock market, the forex market is open 24 hours a day, although keep in mind that the market is closed for most of the weekend. The forex market opens at 22:00 GMT on Sunday and remains open all week until it closes at 22:00 GMT on Friday. Traders around the world always set and meet the requirements for a particular currency, and because currencies are in such high demand, the forex market is open 24 hours a day. This means that traders can trade forex 24 hours a day without interruption.
Forex can trade in a 24-hour window due to the different time zones around the world. Forex runs on a network of computers that constantly trade currencies 24/7 instead of closing at a specific time. 24-hour forex trading is also possible as it is an over-the-counter (OCO) market that does not have a central exchange. Central banks and global corporations always need currency. Money rules the world and international trade will always require worldwide currency. Central banks have linked on foreign exchange markets to function since 1971. Every day the foreign exchange market opens in Australia/New Zealand and then in the rest of Asia, followed by Europe and North America.
Reasoning behind trading throughout the day
The forex market’s ability to trade over a 24 hour period is due to the fact that it trades differently in different parts of different time zones internationally and the fact that trading is done over the internet and not through a specific physical exchange that can be closed at at certain time. For example, when you hear that the US dollar closes at a certain rate, it is the rate at which the New York market closed. This is because the currency is traded around the world even after the New York close, unlike stocks. Securities such as bonds, domestic stocks and commodities are often not relevant or require international phase and therefore do not trade after the standard business day of the country of origin. The trading demand in the markets is not high enough to justify a 24-hour opening in a single day, as the focus on the national market suggests that some stocks trade while it is 3am in the US.
Europe includes major financial centers such as Paris, London, Zurich and Frankfurt. Institutions, banks and dealers carry out foreign exchange transactions for themselves and their clients in each of the markets. Any day of forex trading can begin with the opening of the Australasia area, closely followed by Europe and North America. When one region closes the market, there is another that opens or has already opened and the cycle continues in currency trading. The markets can overlap for a few hours, making for some of the busiest periods for forex trading. An example is that a forex trader in Australia may wake up at 3am. they want.
Being able to understand the forex market hours
The foreign exchange market is made up of international trading companies, banks, investment management companies, central banks, forex brokers and hedge funds and investors from all over the world. Since it is a market that operates in different time slots, it is possible to access it at any time except on weekends.
The international forex market is not dominated by a single exchange, but encompasses a global network of brokers and exchanges around the world. Forex trading hours are based on when trading can open in each participating country. While time zones can overlap, generally accepted time zones for each region include the following:
- For New York it is between 8am and 5pm EST, which is 1pm to 10pm UTC
- For Tokyo, it’s between 7pm and 4am EST, which is 12am to 9am UTC
- For Sydney, it’s between 5 pm and 2 am EST, which is 10 pm to 7 am UTC
- For London, it’s 3am to 12pm EST, which is 8pm to 5pm UTC
The two busiest time zones are New York and London. The period when the two trading sessions overlap, namely New York in the morning and London in the afternoon, is the busiest period and typically accounts for the bulk of the $6 trillion daily trading volume. During this specific period, WMR/Reuters will attempt to compare and determine the spot rate. The rate, which is set at 4pm London time, is the rate used for daily valuations and prices for most pension funds and money managers.
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