Jayden Compared to stocks, bonds and other financial products, forex trading has a obviously feature, which is the forex trading market opening 24 hours a day, giving investors more freedom, but why the forex trading market is available 24 hours a day?
Each market has its own fixed and specific characteristics, but all markets have commonalities.
The forex markets are separated by distance and time, although they influence each other and are also mutual independent. Every trading day, at the end of one centre, orders are passed to other centres, sometimes it sets the keynote for the next market opening. This must be centred on the city where the market is located and radiate to other surrounding countries and places.
Because the time zone of the centre is different, this forex trading market in the business time, and that market off, integration with each other through advanced communication equipment and computer network, forex market participants can trade anytime and anywhere in the world.
Exchange rate differences between markets are small, and forex trading flows smoothly, a unified international forex trading market with global integration and all-weather operation has been formed.
For example, the Tokyo forex market opens and closes from 2:00 am to 11:00 am New York time, while the New York forex market opens and closes from 3:30 pm to 12:00 pm New York time.
Only on the Tokyo forex trading market and the New York forex trading market, their business hours did not overlap in a day, it can be seen that if the forex trading market around the world is added, the opening and closing of the forex trading market is more fluctuating around the world.
From the point of view of the main body of forex trading, the forex trading market is open 24 hours a day to meet its trading needs necessarily, but also maintaining the stable operation of the national economy is necessary.
International banks occupy the largest volume of forex trading, as the main protagonists of forex trading, international banks need to use forex trading in many ways, such as regulating their own positions, achieving customer-related needs, the use of arbitrage opportunities to earn legitimate profits and the implementation of national policies, etc., as long as in the working day, it can be said that the bank’s needs are continuous. And banks in different countries, due to the differences in time zones, have different times when they need to trade.
When bank staff in the United States arrive at work, bank staff in other countries may still be in their sleep. Banks are the lifeblood of the national economy, and their importance is self-evident. In order for the forex trading business of national banks to run smoothly, the forex trading market must be open 24 hours a day.
From the point of view of the forex trading market itself, the forex trading market is actually the sum of the forex trading market in each time zone. As we all know, the essence of forex trading is a currency and another currency exchange, and this characteristic determines the forex trading market is an international market, rather than a country or a region within the market, which is the main reason for its 24-hour opening every day. Therefore, in order to give all kinds of currencies equal opportunity to trade, the forex trading market is open 24 hours a day becomes inevitable.
With the condition that the forex trading market is open 24 hours a day, banks in various countries and regions can perform the functions related to foreign exchange transactions normally, and the economy can run smoothly; ordinary traders with foreign exchange investment needs can also have greater trading freedom to develop more favourable trading strategies according to their needs and rest time; the currencies of various countries and regions can get the opportunity to trade and achieve international convergence of currencies.
In short, the forex trading market is open 24 hours a day, which is the inevitable political internationalization, and economic internationalization, but also the result of the continuous development and improvement of global finance, it is expected that the future of the forex trading market will continue to maintain the state of 24-hour trading.
