Due to our reputation as a leading consulting agency in the online forex and CFD trading space, we are often asked by new traders about what happens when the forex market closes. Before we jump into the answer, it’s important to understand that forex trading never really “closes.” What we mean by this statement is that one can always trade currency, even on the weekends. If you’ve ever been to an airport during the weekend, you’ll notice that the exchange booth is still open.
Why Is Forex Trading Closed on Weekends?
With this in mind, online forex trading is slightly different. Most forex brokers do not offer trading during the weekends, mainly due to a lack of liquidity. What this means in layman’s terms is a lack of demand.
If you have traded for only a short period of time, you’ll know that trading the Euro is most popular during the European and US market sessions but not so much in Asia hours. This is due to demand, meaning more governments, institutions and individuals exchange currency during normal business hours. Since the majority of institutions, governments and banks do not conduct much business during the weekend, the demand or liquidity is rather low.
Can I Leave Orders Open on the Weekend and What Happens if I Do?
Yes, it’s possible to leave orders open on the weekend, however, most brokers do not allow you to close them. The reason is simple: the market isn’t open. In terms of what happens to the orders, well this is going to depend on where the market is trading upon market open. Most forex brokers begin offering trading starting at 8AM in Australia hours, which is 6PM on Sunday in America and midnight in Europe. Often times the market can gap over the weekend, which is a risk to consider when leaving orders open past Friday.
Can I Trade a Currency When the Main Forex Market Is Closed?
No, because the market isn’t open, it’s not possible to trade until it opens again. The reason the majority of brokers don’t offer trading on the weekends is due to low liquidity, which we outlined above. There are a handful of brokers which do offer weekend trading, however, the spreads are often extremely high, which isn’t an ideal way to trade. For this reason, we don’t recommend trading on the weekends and suggest waiting until the market opens back up.
Forex Consulting Expertise – Guidance in Selecting the Best Broker to Trade With
If you are interested in trading forex online but don’t know where to start, schedule a call today with one of our specialists. We are happy to guide you through the process of selecting the best forex broker that meets your unique trading needs and requirements. We look forward to hearing from you!