The forex markets are open 24 hours a day, five days a week. The official opening hours are from 17:00 EST on Sunday to 16:00 EST on Friday. EST refers to the time zone in which cities such as New York, Boston, Atlanta, and Orlando in the U.S. and Ottawa in Canada are located.
Time and investing in forex
Whenever discussing the forex market, the UTC time zone designation is also visible. This abbreviation stands for “Coordinated Universal Time” and is compatible with the GMT time zone, i.e. Greenwich Mean Time. London, United Kingdom is located in the UTC zone.
Since no one market is superior to the others, forex trading hours are based on the trading opening hours of the participating country. The trading sessions in London and New York overlap to some extent, which is why there is often a high volume of trading at this time of day. Next day exchange rates are set at 16:00 London time/UTC.
How is the forex market regulated?
Even though this market operates in more than 180 countries, there is no organization that is responsible for regulating it. However, there are over 50 independent governing bodies around the world that oversee forex trading to ensure transparency and accountability.
The most important regulatory bodies overseeing foreign exchange activities include the Australian Securities and Investments Commission (ASIC), the Financial Conduct Authority (FCA) in the United Kingdom, and the Monetary Authority of Singapore (MAS). These regulators set the standards that all financial service providers must adhere to, such as registration, licensing and auditing requirements, and may step in if a service provider is found to be in breach of laws or regulations.
With these institutions, forex traders have more confidence that the trading service they are using is fair and ethical.
What major currency pairs can be traded?
The best known and most frequently traded are the “big” currency pairs. It is the combination of the US dollar (USD) traded against one of seven other major currencies: the euro (EUR), the British pound (GBP), the Swiss franc (CHF), the Japanese yen (JPY), the Canadian dollar (CAD), the Australian dollar (AUD) or the New Zealand dollar (NZD). The four most popular currency pairs by volume are EUR/USD, USD/JPY, GBP/USD, and USD/CHF.
Currency pairs outside this group — mainly those that do not include the U.S. dollar — are considered “small” or “exotic.” These pairs can have a high value and a significant trading volume, but it is usually smaller compared to the big pairs.
It is important to remember that there are no right or wrong currency pairs in trading. While the big pairs are the most liquid, the markets fluctuate in many ways, often due to country- or currency-specific economic news. As a result, this will be reflected in market prices. Therefore, traders should make it a habit to monitor the overall market conditions to find the opportunity that works best for them and their trading style and strategies.
In addition, traders should be aware that not all currencies are traded continuously, even though the markets are open seven days a week. Local public holidays that may cause a trade interruption should also be taken into account. An economic calendar can help you prepare for the planned market close, and live spread tables provide a practical breakdown of current market prices.