With the economic globalization, the interaction of economic activities among countries, including trade, tourism, consumption, and investment in various assets, becomes more and more frequent. In the process, currency transactions naturally occur. Forex / FX is the financial market which deals with currency transactions all over the world in a decentralized form.
The forex market does not have physical entity, and most of the transactions happen in the so-called OTC market. With the popularity of communication networks, trading is no longer limited by time and distance. The development of technology has also made forex trading electronic, providing great flexibility and low transaction costs, so that there is almost no threshold to participate in forex trading.
Participants in the forex market include the central bank, the government, investment banks, commercial banks, funds, financial institutions, major enterprises, importers and exporters, speculators, ordinary investors and so on. As a result, the exchange market is a market with the largest trading volume and the strongest liquidity in the world. According to a survey conducted every three years by the Bank for International Settlements (BIS), the average daily volume of transactions on the global forex market was $6.6 trillion in April 2019, up nearly 30 percent from $5.1 trillion in 2016. The main purpose of participating in the forex market, in addition to promotion of international trade and investment, also include speculation and carry trades.
Forex market is open 24 hours a day?
With the development of information and technology, time and distance restrictions have disappeared. In addition, due to the different locations of major financial centers, from Sydney to Tokyo, Hong Kong and Singapore, and then from Frankfurt to London and New York, the markets operate consecutively and are closely linked.
When the Asian trading session ends, the European trading session begins, followed by the North American trading session, and back to Asia. Therefore, the forex market dominated by OTC trading has become a place that can trade 24 hours a day, five days a week. Only in the event of weekends and major festivals in various countries, the forex trading hours will be adjusted.
In addition, 24-hours trading in forex has become more popular due to the rise of retail forex brokers and online forex trading platforms since 2000. Forex brokers have lowered the entry barrier, allowing more smaller traders around the world to connect with the global forex market through their platforms. In addition to making the forex market more active and giving it ample liquidity, it also makes the entire currency market ecosystem more complete.
Risk Warning: The above content is for reference only and does not represent ZFX’s position. ZFX does not assume any form of loss caused by any trading operations conducted by this article. Please be firm in your thinking and do the corresponding risk control.