What is really meant by "Forex Market Hours"!?

[Tyce Shelburn]

Ok, so the FOREX market is being marketed as a 24 hour trading opportunity...any reasonable broker is open Sunday evening to Friday evening. However, everywhere you look their are market hours listed for the major currencies (New York, London, Sydney, Tokyo).

What is really meant by stating the "New York, USA" session is 8:00 am - 5:00 pm?? Are the market times for each "session" (i.e. New York) the limitations ONLY for commercial traders and Central Banks registered in that specific region?

You see my confusion?? How can we say this is a 24 hour, 5 days a week market, then label trading sessions by physical regions? If central banks and commercials are unrestricted by trading hours, then the FOREX market hours mean nothing as the Liquidity would be unrestricted at any time of the day and not subject to the swings we all see at the "Market OPEN". Again, the volatility is seen at both the FOREX market openings and again at the Stock Exchange openings (this goes for all currencies in all regions.)

Any clarity on what is meant by the market session hours would be greatly appreciated.

 

[Tyce Shelburn]

Exhibit A
http://www.investopedia.com/terms/forex/f/forex-market-trading-hours.asp

This is one example of defining FOREX market hours.

 

[cowmadagan]

That's when banks do most of their trading. While bigger banks have a night trading desk as well, the banks do most of their trading during those times which also means that that geographical area is responsible for vast majority of the major movements.

I should also mention that the stockmarket is a MAJOR factor in the currency markets, particularly regarding safety and risk trends. Those also match the geographic time zones.

 

[Tyce Shelburn]

Cowmadagan - Big difference in the stock market and FOREX.
I concur, the Stock Exchange's all over the world influence the FOREX market with volatility/volume. However, NO ONE can trade the NYSE before 8:30 am nor after 4:00 PM. This is why you have large spreads on bid/buy prices when the market is closed (analogous to the FOREX rates we see for open positions on weekends). For clarification, USA FOREX times are ~ 8am-4pm, this is 1 hour prior to options/futures trading, which affects the FOREX. However, exactly right at 8:00am EST, the FOREX market goes liquid (even before being deregulated in 1997).

Can you site your references on, "(this is when) banks do most of their trading"? What you're telling everyone here is that the market hours are based on volume and that absolutely no restrictions on Commercial Traders and Central Banks are imposed at any hour of the day. Market hours based on VOLUME and REGION seems like a stretch....If I want the lions share, representative of a Central Bank or greedy Commercial trader, I'm going to trade the London Session every time.

Furthermore, the general definition states that during "X" time to "Y" time the FOREX market is "OPEN"......well if it's "OPEN", then is has a CLOSING. I ask now, who is affected by the "CLOSE"????

I think your confusing Brokers with Central Banks & Commercial Traders. (My profile says Recruit, but this isn't my first Rodeo)

 

[Ricex]

You see my confusion?? How can we say this is a 24 hour, 5 days a week market, then label trading sessions by physical regions?

Because the planet turns and people have to sleep, what's there to get confused about?

If a company in London want to buy something from another country or invest in another country they are unlikely to do that at 3.30 in the morning, they do it within their working hours. Stock markets, oil etc are all traded within business hours. I mention London because it is the centre of forex trading holding around 33% of all transactions. If London is sleeping then the number of market players is dramatically reduced. Yeah there's night time trading but this is a small percentage of the day trade activity.
You can technically trade forex at this time but if your speculating what's the point, why not wait for everyone to arrive at the party.
Events such as economic and political news which can move the market are also released within a certain timezones working day.

If you have experience in trading I'm not sure why your confused it's pretty basic stuff.

Forex is tradable Sunday night to Friday evening non stop, but within that are periods of greater or lower volatility due exclusively to normal business working hours.

 

[cowmadagan]

Tyce, I didn't use the word 'broker' even once. Furthermore, 'Central Banks' are issuers of national currency, they don't trade on a daily basis, and the big funds like in credit default swaps and banks dwarf the ability of the central banks to get their own way.

The openings and closings affect the people who want to go to a teller, which includes importers and exporters, which limits the inflow of capital to the banks that are trading over night.
As Ricex said, this is pretty basic stuff, and I don't know why you seem to be accusing me of invidiously replying.

 

[Eric Alyea]

A time chart

I have this posted on my cork board:

https://www.forexpeacearmy.com/forex-forum/beginners-bootcamp/8632-time-trade.html#post29944

this was from Ricex