Flaw in the system?

Beginner Questions
#1

I have been wondering why when I login to my trading platform on a Sunday night (at the same time that Tokyo opens) that within a couple of minutes of opening there are sometime HUGE movements on certain pairs and I could never understand why. Then it dawned on me - forex does not ever really close does it? At least not if you are trading with a non-dealing desk broker? I noticed that the rates continue to change throughout the weekend with a non-dealing desk broker. Is this not a flaw in the system? I mean to say - assuming that your dealer closes on Friday (with New York) and opens again on Sunday night (with Tokyo) - you know before they open - what the current Buy and Sell rate of a pair is - or am I not reading this correctly?

It is almost like knowing which horse has won the race before the bookmaker has received the race result - if I’m correct that is.

Any comments?

Added after the above:

On second thought - is this rapid movement sometimes just due to the same conditions as described in the thread on this board ‘Scalping the Asian High and Low’ i.e. because of the different market opening times?

Regards,

Dale.

#2

I don’t see what you are calling a flaw here. Yes, in some places there is trading over the weekend. It is very, very limited, though, and prices generally don’t move in any noticeable or meaningful fashion, aside from the spreads getting widened out substantially. Yes, thanks to that action you could get a read on where Tokyo will open trading.

Here’s my question to you, though: How can you profit from that?

The only way this would be anything like knowing the result of the race before the bookie does (to use your example, which is a bit off because the bookie won’t take bets once the race has started, if I’m not mistaken), is if you could somehow put on a trade at a price other than the initial bid/offer seen on the Tokyo open. How do you propose to execute a trade before the open, so to speak?

By the way, knowing where the market is going to open is not confined to forex. It’s been that way in stocks for years.