Forex working hours | Inside Forex trading

In comparison with exchanges there is no such thing as a ?trading time? in the Forex market. The market does not close for lunch or go to bed. Forex is a twenty-four-hour?market operating five days a week. Instead of single trading days, there are weekly trading sessions. A session starts at 11:00 p.m. (GMT) on Sunday in Tokyo and ends at 10:00 p.m. on Friday in Chicago.

The Forex market can be separated into sectors: Australian, Asian, European and American. On working days a session sequentially passes from one financial center to the other by the following trajectory: Wellington (New Zealand), Sydney (Australia), Tokyo (Japan), Hong-Kong (China), Singapore, Frankfurt (Germany), Zurich (Switzerland), London (Great Britain), New York, Chicago and Los Angeles (USA). Trading activity in the corresponding currencies rises as the market moves through the time zones and financial centres. For example, when the working day is in full swing in Sydney the most actively traded currency pairs are going to be the EUR/AUD and USD/AUD, whilst when the session reaches Tokyo the most active ones are for the JPY and so on. The most active overall is the American session. By its beginning most of the important financial news connected with fundamental economic activities has been released.

Some banks get out of the general trading process because of national holidays which are usually holidays for banks too. In general, however, due to differences between time zones there is always at least one or more active financial institutions (by turn or simultaneously) that make Forex a 24-hour market. Even on the 1st of January trading continues because the banks in Muslim countries are still open. Actually, the market is also open on the weekends but the trading activity is so weak that it is very hard for a broker to find a partner (contractor) for the deal. Obviously this?isn?t?a problem during week days.

The most common?transactions in Forex

• Tod (derived from the word ?Today?) ? transactions take place at the same day as the deal is arranged.
• Tom (from the word ?Tomorrow?) ? transactions are carried on the next working day following the deal.
• Spot ? transactions take place on the second day after the deal. There are deals that can be closed more than two days later; such transactions are called forward (future) transactions.

Forex value date

The ?value date? in Forex terminology (or payment date) is the actual date of money transfer between market participants as transactions can be done at the same moment the deal is arranged or can be appointed to some moment in future.

The value date is the day when both parties of a deal come to an agreement on some major parameters of a deal:

• The essence of a deal (whether purchasing or selling). Definition of the currency pair (the currency that is to be sold and bought).
• The size of an interest (the sum of money).
• Exchange rates of the currencies.
• The value date.
• Payment instructions. According to statistics the most popular transactions are those?with the Spot value date, as it takes much more?time to fulfill the deal than to arrange it. This?is because of the drawing up of all the the?necessary documents and the?settling?with contractors that are usually located in different time zones.

Source: http://blog.forex4you.com/forex-working-hours/

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