What is a novice trader looking for when he searches for the word “Forex 24?” Probably proof that Forex is a 24/7 foreign exchange market. The inquisitive mind of a beginner tries to find answers to many questions that torment his mind. Therefore, let’s open this issue as broadly as possible, having received convincing evidence of Forex 24 work around the clock.
Opening hours of the currency exchange
It is known that the international Forex market works around the clock, stopping only on weekends (Saturday and Sunday). Although some traders believe that even on weekends Forex works, not all brokers simply have access to quotes. The explanation is – if there is no trade on the weekend, then why so often are there gaps at the opening on Monday? True or not, the fact remains – a trader who has the necessary information, namely the state of quotes, is always one step ahead of other traders. These traders are looking for brokers to trade on the weekend.
Still, most traders are sure that Forex does not work on weekends. On ordinary days, each trading day is divided into 3 periods: European, American and Asian trading sessions. Thus, trading FX does not stop throughout the day, which is why they say “Forex 24 hours”. There are periods between trading sessions when the volatility of currencies falls as trading volumes between sessions are very small. In other words, we have flat movements when the price moves in a small range. Most traders do not trade during a flat, preferring trend movements.
Let’s pay attention to currency quotes. The fact that the quotes of different brokers differ insignificantly (as a rule, no more than 1-3 points) also speaks of the smooth operation of the Forex exchange. Large banks, like national banks of different countries, have servers that ensure the continuity of quotes and, in fact, the operation of the exchange. If, due to some reason, one or more servers stop working (reboot, prolonged power outage, physical damage, etc.), its work is replaced by the servers of other banks.
A newcomer to trading immediately raises a question: “So, banks can influence the values of quotes?” It turns out that it is possible to make a correction in the direction favorable to a specific group of people? In fact, the answer is no. Quotes are influenced only by supply and demand, that is, trading volumes, as well as economic news (psychological factor).
If a particular currency is bought a lot, the price will rise. If they sell a lot – the price will fall. If important news comes out, positive for the economy of a given country, then the national currency in most cases will grow. If negative, it will fall. Why not 100% of the time? Because other influences on quotes cannot be disregarded.
For example, if the news is positive–say, an increase in the number of jobs in the United States–but at about the same time, the Forex market maker “threw” large volumes of the Japanese yen into the market, selling the dollar against the yen (the pair USD / JPY), then this pair will show a downward movement. Thus, market participants (players) can have an indirect effect on currency quotes by buying or selling a particular currency in large volumes.
Another case is when the psychological component comes into play. And this process takes place in 90-95% of cases. Price movement is always a consequence of many processes, and the psychology of traders is an important component. If, for example, economic news turned out to be positive for a particular currency, but the market (traders) are under the influence of the previous “bad” news or, conversely, are waiting for the next, more important news, then the reaction to the primary news may turn out to be opposite to the expected one.
Advantages of 24 Hours
The continuity of the currency exchange opens up new opportunities for traders. You can turn on the trading platform at any time and start making money. In reality, it happens a little differently (for experienced traders): almost every trading strategy involves entering the market only at certain intervals, for example, only during the American or European sessions.
The presence of different trading sessions allows you to create new trading strategies, which are based on calm price fluctuations between sessions. Some traders create new TSs, taking into account their needs and market characteristics (high volatility of a certain currency during a specific session and low – during other sessions).
Also, the continuity of trading plays into the hands of traders using trading advisors. After all, the advisor reacts to any movement of the currency pair when the trader can already sleep or move away from the platform. And an advisor will never miss a profitable move.
Trading 24 hours allows the trader to choose a convenient trading strategy for his needs and time costs. Trade, earn and remember that the profitability of trading very much depends on the broker you choose.