NEWBIE QUESTION, why is the EUR/USD 24 hour?

[gohlester93]

Hi guys,

I am not sure why, im currently on MT4, and I saw the candlestick moving up and down! I thought its suppose to be only available when the New York and Europe market opens together? Isn’t it that so?

Please advise.

I use this website to track the timings.

Please advise all sifus, thanks

[Clint]

[B]Every pair[/B] is available for trading in [B]every mark[/B]et around the world, [B]24 hours per day,[/B]

— from early Monday morning New Zealand time until late Friday afternoon New York time.

.

[PipMeHappy]

Hello GohLester!

EUR/USD is traded from Sunday night to Friday night (European time) continuously… there are no breaks…

Equities, Futures, etc. have opening and closing hours, for example the FTSE100 index opens at 7am (GMT)

and closes at 9pm (GMT)… currencies do not have such restrictions, at least not in the spot forex market.

You must be confusing liquidity/volume and trading times…

[PipMeHappy]

[B]Every pair[/B] is available for trading in [B]every mark[/B]et around the world, [B]24 hours per day,[/B]

— from early Monday morning New Zealand time until late Friday afternoon New York time.

.

What he said

[gohlester93]

Hi sifu Clint and Pipmehappy!

Thanks for the clarification

So, what does the purpose of opening and closing the markets serve as?

Please advise

[PipMeHappy]

Hi sifu Clint and Pipmehappy!

Thanks for the clarification

So, what does the purpose of opening and closing the markets serve as?

Please advise

Clint knows more than me about this…

but, basically, there are PHYSICAL opening hours of exchanges (like the New York Stock Exchange,

for example), which are your average office hours (like 9am to 5pm), then there are the

ELECTRONIC/VIRTUAL trading hours of the exchanges (like the NYMEX), which are different…

As for the PURPOSE of these hours: knowing that certain trading hours are in place means that

traders know when to EXPECT the probability of higher liquidity… Higher liquidity does not

mean more VOLATILITY, as, in fact, more liquidity has the effect of dampening extreme moves…

That is why the highly liquid pairs, like EUR/USD, struggle to get big moves going… to put

it in a really basic way.

Over to Clint

[Clint]

So, what does the purpose of opening and closing the markets serve as?

[B]Markets traded on exchanges[/B] open and close on a daily basis, mainly because they have done it that way since their founding, decades ago in most cases. In “the old days”, before electronic trading, these exchanges were local exchanges manned by people who worked a daytime shift and then went home. Later in their histories, many exchanges added “after-hours trading”, which sort of blurs the line between the market being open and being closed. But, that doesn’t apply to our market.

[B]The currency market is an off-exchange market,[/B] with no physical location, ultimately run by big banks that have offices in principal cities around the world, linked electronically. Most of these big banks, collectively known as the interbank network, have offices in Tokyo, London, and New York, where currency trading takes place. As the normal business day comes to an end in one location (Tokyo, say), each bank’s “book” of open positions and open orders is passed to the bank’s next trading desk (that would be London, in this example). The hand-off of the “book” is seamless, and customers of the bank are unaware of it. None of this was practical before the advent of computers and electronic communications networks, such as Reuters and EBS.

[B]This “top tier” of the currency market essentially never closes.[/B] You can be sure that if the Federal Reserve, or the Bank of England, wants to move big bucks at 2 am on a Sunday morning, they won’t have to wait for the currency market to open on Monday.

But, at the bottom of this market, where we trade — the retail spot forex market — we never deal with banks. We deal with retail forex brokers, who choose not to operate on the weekend, because they have found that there isn’t enough retail volume to make it worthwhile. [B]So, “the market”, as we experience it and have access to it, “closes” on Friday afternoon (New York time), and remains closed until Monday morning (New Zealand time), when a new retail trading week begins.[/B]

The broker Oanda experimented with 24/7 retail trading, staying open on the weekends, but abandoned the experiment, because it just wasn’t profitable.

If you want to read more about this subject, take a look at this ARTICLE by Kathy Lien. It’s 7 or 8 years old, but it still contains some relevant information.

Edit: By the way, what’s a sifu?

.

[PipMeHappy]

Excellent reply by the Lord of Trading himself,

Mr. Clint!

[gohlester93]

[B]Markets traded on exchanges[/B] open and close on a daily basis, mainly because they have done it that way since their founding, decades ago in most cases. In “the old days”, before electronic trading, these exchanges were local exchanges manned by people who worked a daytime shift and then went home. Later in their histories, many exchanges added “after-hours trading”, which sort of blurs the line between the market being open and being closed. But, that doesn’t apply to our market.

[B]The currency market is an off-exchange market,[/B] with no physical location, ultimately run by big banks that have offices in principal cities around the world, linked electronically. Most of these big banks, collectively known as the interbank network, have offices in Tokyo, London, and New York, where currency trading takes place. As the normal business day comes to an end in one location (Tokyo, say), each bank’s “book” of open positions and open orders is passed to the bank’s next trading desk (that would be London, in this example). The hand-off of the “book” is seamless, and customers of the bank are unaware of it. None of this was practical before the advent of computers and electronic communications networks, such as Reuters and EBS.

[B]This “top tier” of the currency market essentially never closes.[/B] You can be sure that if the Federal Reserve, or the Bank of England, wants to move big bucks at 2 am on a Sunday morning, they won’t have to wait for the currency market to open on Monday.

But, at the bottom of this market, where we trade — the retail spot forex market — we never deal with banks. We deal with retail forex brokers, who choose not to operate on the weekend, because they have found that there isn’t enough retail volume to make it worthwhile. [B]So, “the market”, as we experience it and have access to it, “closes” on Friday afternoon (New York time), and remains closed until Monday morning (New Zealand time), when a new retail trading week begins.[/B]

The broker Oanda experimented with 24/7 retail trading, staying open on the weekends, but abandoned the experiment, because it just wasn’t profitable.

Edit: By the way, what’s a sifu?

.

Hey Clint! Thanks for the indepth explanation ^^

Sifu means master

Thanks once again man ^^ I have more questions to come, hope you will help me answer them !

Cheers !