One of the reasons why many traders prefer trading with foreign exchange and are enthusiastic about forex trading are the forex trading hours. For, for example, during the stock trading at the latest late evening a break is taken, the Forex market opening hours are virtually from Sunday night to late Friday evening. Dealers can therefore be nonstop and without interruption in principle from Sunday to Friday. The reason for the round-UM-clock trading is, among other things, that the trade takes place exclusively via the trading systems on the computer, so that the execution of the orders takes place sometimes completely automatically.
Another reason for the very customer-friendly forex trading hours is that the foreign exchange trading takes place on all continents (apart from the Antarctic). To choose the most suitable Forex Broker helps our online foreign exchange Broker comparison. Due to the time shift between the individual countries and continents, traders can speculate quasi at any time with currencies. If the trade in the US has just concluded, forex trading starts in Australia. Only from Friday evening until Sunday in the late evening generally no trading takes place.
Forex trading is possible on weekdays around the clock.
Rollover costs are rare.
Time zones should be kept in your eyes!
Decentralized market without permanent opening hours.
Only on weekends there is no trade.
Forex market is the largest and most liquid market in the world with a daily turnover of over $ 6,590 billion in 2019. Investors with foreign exchange can act. As soon as the stock exchanges close in Europe, the stock exchanges open in North America. Later in the evening investors can also act on Asian stock exchanges. But attention: For currency trading is not about the classic stock market exchanges. The liquidity depends only on the official opening hours. But in principle he is possible 24/5. Therefore, many brokers offer trading in currencies during the week around the clock. Rollover costs are rare. However, swap costs incurred if the investor uses a lever.
Forex trade - is a decentralized market without solid stock market opening hours. With regard to the opening hours, traders should always keep an eye on the respective time zones and time shifts.
Forex trading is organized decentralized, which generally means that investors can always act forex. Therefore, the question of when positions should be concluded is more likely to answer for course developments and personal forex experiences. If the margin is undercut, it can lead to a subsequent obligation. At the latest at this moment it makes sense to close an open position to avoid further losses. A fear of rollover costs as in stock trading is therefore not necessary for foreign exchange trading. A rollover can even have a positive effect, because it comes as good as never to greater course gaps, so-called Opening Gaps. Why?
Forex trading takes place directly between the market participants.
Forex investors can act around the clock.
Forex trading is decentralized and does not take place at a central stock market.
There are positive as well as negative swap costs when overnight trade (when using a lever).
Forex trade is very decentralized and does not only take place on a stock exchange. Market participants act prices for individual currencies directly with each other. Important market participants are also banks that are active at the Forex market. At the weekend banks and large companies usually do not participate in the trade. Therefore, fewer capital is on the market these days and trade is unattractive for this reason. Prices arise in forex trade through supply and demand on the market.
Even though it is rare through the opportunity to act around the clock, sparse costs, we look at the effects more closely, which arise when a roll is created.
What is a negative or positive roll?
If the interest rate of the currency purchased is lower than the interest rate of currency, which was sold, a negative roll arises. If the interest rate of the currency that was purchased is higher than that of the currency sold, it comes to a positive roll. This profit will be paid to the appropriate trading account.
Forex Stock Exchange Opening Hours
The round-around-clock opening hours have another advantage, also in terms of costs: there is a well-known phenomenon that often occurs at the end of a trading day. The market participants react, for example by news, shortly before the end often in a way that it comes to distortions of course developments. This effect remains largely due to foreign exchange trading, which is an advantage.
To explain it again: due to the time shift and direct trade of market participants with each other, it is possible to trade currencies around the clock. However, one should note that institutional investors or investors are not acting on weekends. This in turn means that on Saturday and Sunday, not the entire market can be used. For this reason, all FOREX dealers have adapted to the opening hours and act exclusively from Sunday 10 pm to Friday 23.00 clock.
There are hardly any costs due to opening hours. If the interest rate of the currency purchased is lower than the interest rate of currency, which was sold, a negative roll arises. If the interest rate of the currency that was purchased is higher than that of the currency sold, it comes to a positive roll.
Influence of Forex trading hours
Forex trading hours have an important influence on the pricing of trading. Because basically the brokers earn money by conveying certain positions between buyers and sellers. This is especially simple, if just many traders are active in the market. An example:
An investor wants to open a call position to EUR / USD.
The investor trades in the afternoon Central European time.
At this time, both European and most American investors are active in the market.
There are correspondingly many providers and demand for the position of the Trader.
For the broker, it is easy for the main trade times to bring the positions to the market. This is then reflected in a lower spread. Accordingly, these search costs for the broker increase, if just a handful of investors in the markets are active. For the investor: if it is to be cost-effective as possible, the Forex main trade times must be observed.
Forex trading hours have a decisive influence on the costs incurred during trading. Because for the brokers, it is much easier to convey between buyers and sellers at the main trade times. This usually reflects in the lower spread.
Tip: Outside the forex trading hours use analy
With foreign exchange investors can trade almost around the clock because, in particular, Majors such as Euro or US dollars are traded on all worldwide markets. The trade is not possible at the weekend, here the stock exchanges are closed. The problem: Especially at the weekend most investors have time to deal more intensively with the markets. But although no active trading can take place on Saturday and Sunday, traders offer opportunities to increase the return:
Far from the hectic everyday life, a lot of time remains on the weekend to deal more intensively with individual underlying values. How are the long-term growth opportunities? Did the last weeks of commerce positive or negative?
Of course, traders can also search for such foreign exchange at the weekend, which have not yet found a place in their own trading strategy - but maybe much promising.
Even the own trading strategies can be analyzed in more detail on the weekend. For many brokers, investors can quickly make a weekly view and evaluate them.
Especially on Sunday, a preparation for the trade week should be done in itself. Traders can retrieve the latest figures for certain currency pairs and adapt the strategies accordingly.
In particular in forex trading, it is not only important for traders, the stock exchange opening hours and the courses, the currencies that they act with. Since the forex trade can be very volatile, it is important for traders to stay informed about current developments, market news, but also news from politics and business. If, for example, the European Central Bank increases its key interest rate, this decision can affect the foreign exchange market.
Forex trade is decentralized and does not take place on a specific stock exchange. Traders can trade at foreign exchange during the week. Envelopes in Europe on the Dealing Day, just the trade begins in the US due to the time shift. Traders should therefore always pay attention to the forex trade and the stock exchange opening hours in the individual countries.
Since they are traded around the clock, traders must decide when they close a position. Some brokers charge for holding a position also overnight costs. When selecting a broker, traders should pay attention to the costs of each broker. Also these have the stock market opening hours impact, as the mediation of a position for the broker are easier when many traders are on the market.
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