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Forex Working Hours - Forex Basics (Lesson 5)

The Forex (foreign exchange) market operates 24 hours a day, five days a week, making it one of the most accessible and liquid financial markets in the world. Here's an overview of Forex working hours:

  1. Market Structure: The Forex market consists of various trading centers around the world, with the major financial hubs being in different time zones. These centers include New York, London, Tokyo, Sydney, Frankfurt, Hong Kong, and more.

  2. Global Forex Trading Sessions: The Forex market is often divided into four major trading sessions, each corresponding to a specific geographical region. These sessions overlap to provide continuous trading opportunities:

    a. Sydney Session: This session starts at around 8:00 AM local time and overlaps with the Tokyo session. It is considered the Asian session. Major currency pairs involving the Australian and New Zealand dollars are actively traded during this time.

    b. Tokyo Session: The Tokyo session begins around 9:00 AM local time and overlaps with both the Sydney and London sessions. It is the Asian-Pacific session and typically sees higher trading volumes in yen-based currency pairs.

    c. London Session: The London session opens around 8:00 AM GMT and overlaps with the Tokyo session. It is often considered the most important session due to the high trading volumes, particularly in major currency pairs like EUR/USD, GBP/USD, and USD/JPY.

    d. New York Session: The New York session starts around 8:00 AM EST (Eastern Standard Time) and overlaps with the London session. This session is characterized by increased trading activity in North American currency pairs, such as USD/CAD and USD/CHF.

  3. Overlapping Sessions: The most active periods in the Forex market occur when multiple sessions overlap. The London-New York overlap, in particular, from 8:00 AM to 12:00 PM EST, is known for its high liquidity and is when many traders focus their attention.

  4. Weekend Gap: The Forex market is closed to retail traders during the weekend, starting from Friday evening (typically around 5:00 PM EST) and reopening on Sunday evening (around 5:00 PM EST). During this time, price gaps can occur due to geopolitical events or market news over the weekend.

  5. Holiday Hours: Forex trading hours can be affected by public holidays in various countries. Major trading centers may be closed or have reduced trading activity on these days.

  6. Continuous Nature: The continuous 24-hour operation of the Forex market allows traders to enter and exit positions at almost any time, providing flexibility and opportunities for traders in different time zones.

  7. Electronic Trading: The Forex market operates electronically, enabling traders to access it through online trading platforms provided by Forex brokers. This accessibility further contributes to its 24/5 trading availability.

It's important to note that while the Forex market is open 24 hours a day during the trading week, not all hours are equally active. Trading volumes and volatility can vary throughout the day, and traders often plan their activities around the most liquid and active trading sessions to maximize opportunities and minimize risk. Additionally, traders should be aware of news events and economic releases that can impact currency prices during non-trading hours.


Keywords
Electronic Trading - Holiday Hours - New York Session - Forex Overlapping Sessions -
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