Introduction

The forex market is considered to be the biggest financial market across the world. This form of trade is not centralized to one particular location; it involves various parties in different forex markets in the world. Due to this fact, the market relies fully on electronic communication networks to perform the trades.

The forex market is open and active from 9 pm GMT on Sunday and closes at 8 pm GMT on Friday. Any period between the weekly open and close has at least one forex market at a particular region open. There are particular periods where the market in different regions overlap; between the close of one market and the commencement of another market.

The scope of this trade is observed in an international stage as various parties or traders are in constant business of making demands or meeting to an agreed-upon demand of a certain currency.

Currency is widely required for trade across the globe by banking institutions and major corporations. Central Banks of various regions have depended on Forex markets since the early 70s. This period marked the end of the gold standard dominance; therefore most of the internationally used currencies are not linked to the gold valuation standard.

Reasons for the 24-hour trade

The forex works on a 24-hour basis due to the different time zones that exist in the world with parties in these time zones active in the forex trade. Therefore trades are managed in a network of communication appliances linking all these zones at whatever time facilitating the trade. 

A perfect example is that the close of the euro at a particular rate means that was the rate closed in London. The euro will, however, be traded across the globe even after the close in London. A report from the Bank for International settlements issued in 2016 reported the daily amount traded in the Forex market was just above five million US dollars.

For this reason, Forex markets are run at a 24-hour basis which is different from aspects such as securities. Security trade involves the trade in domestic stocks, commodities or bonds. These assets not as relevant as securities nor do they require a global platform for trade. The demand for security trade is also not that high to permit a 24-hour trade basis. Being a domestic market the trades do not go beyond the end of a business day.

There are three major regions of trade; the Australia region, the Asia region, the European region and the North America region. Australia and Asia join up to form one region; the Australasia region. The European region encompasses London, Zurich, Paris and Frankfurt. All major banking institutions and dealers, therefore, trade on behalf of their clients or themselves in each of these markets. A good performance Forex robot such as Forex Cyborg and Wallstreet Forex Robot could help a lot in this unstable market.

The forex trade starts each day at the Market opening in Australia, followed by Asia, them Europe and lastly North America. Each of these regions has its individual open and closing time. There exist some overlaps as the market end of one region coincides with the market open of another region. Therefore the forex trade continues to be traded at a different region. The period of overlaps, lasting three or four hours, is usually met with the most action; especially the overlap between Europe and North America.

The market hours in Forex trade

There are four main market sessions differentiated by the timing; the New York Session, the Sydney Session, the London Session and the Tokyo Session. The time standard applied will be the Greenwich Meridian Time (GMT).

The New York Session opens at noon and ends at 9 pm during the summer; it experiences a one hour delay during the winter season. The Sydney Session opens at 10 pm and ends at 7 am during the summer; it starts and ends an hour earlier during the winter season. The London Session opens at 7 am and ends at 4 pm during the summer; it experiences a one hour delay during the winter season. The Tokyo Session opens at 11 pm and ends at 8 am during both summer and winter periods. 

The two critical time zones where the most trades are conducted are the London and New York time zones. During this period the foreign exchange rate is established; the Reuters benchmark foreign exchange rate to be precise.

There are however some currencies in certain emerging regions that are not traded for 24 hours. The seven key currencies traded on a 24-hour basis in the forex market are:

• The Japanese Yen
• The US Dollar
• The Euro
• The Australian Dollar
• The British Pound
• The Canadian Dollar
• The New Zealand Dollar

Conclusion

Currency is an international requirement for banking institutions, trade and all forms of business; therefore a 24-hour market system is required to satisfy the demands across the various time zones. For this matter, there is no day in the trading week a single party will be unable to make trades in the forex market. To learn more about Forex market, please visit MyTradingTools.com.