How the foreign exchange market works, schedule, holidays, principles
The Forex currency market is not, in its essence, an exchange in the direct sense of the word; all operations on it are carried out online, that is, it does not have a specific trading location.
The purchase and sale of currency is carried out on special servers, using orders traveling along securely protected lines.
How the foreign exchange market works is almost around the clock, Forex opens at 2 a.m. Moscow time on Monday, and ends its work at night from Friday to Saturday.
That is, almost 5 days a week, with the exception of holidays - Easter, New Year, national holidays.
The work is carried out depending on trading sessions, which are tied to time zones. Usually there are four such sessions - Asian, European, American and Pacific.
Opening hours coincide with the operating hours of banking and financial institutions, for example:
Asian – banks from Japan and the Asian region operate.
European – trading is carried out during the work of financial institutions in Europe.
American – tied to the functioning of sites in New York and Chicago.
Pacific – currency trading takes place on Australian platforms.
Also at this time, all the important news that affects the exchange rates of the region comes out.
The binding in this case is purely conditional, only based on time zones that correspond to one or another part of the world.
If you are interested in specific opening hours, see the trading session schedule - http://time-forex.com/torgovye-sessii-forex
The foreign exchange market with cryptocurrencies works a little differently, although this asset is classified as a digital asset, it can still be classified in this niche.
Unlike the classic currency exchange, the cryptocurrency market operates 7/24, that is, 7 days a week, including Saturday and Sunday.
How does the foreign exchange market work during the holidays?
Like any stock exchange, there are also holidays and weekends, but there is one peculiarity. As a rule, trading is not held only during the trading session in the country in which financial institutions are closed.
That is, for example, on US Independence Day there is no trading only in the American trading session, but on the same day you can trade on other exchange platforms.
If you are interested in how the foreign exchange market works on holidays, you will find the holiday schedule here - https://time-forex.com/info/vyhodnye-prazniki-forex
Laws of the foreign exchange market
The foreign exchange market operates according to general market laws; exchange rates are influenced by both internal and external factors.
External - economic events in the country responsible for issuing a particular currency, news from world markets that are in one way or another related to this monetary unit.
Internal – the amount of supply and demand.
The trading process itself comes down to a few simple steps, which are carried out using special software. A trader just needs to place an order to buy or sell a currency at the existing market rate and the transaction is considered open.
Foreign exchange market participants.
There are several main groups of trading participants who work on the Forex currency market:
Market makers are the largest market players; they conduct their trading directly on the currency exchange itself, concluding transactions in large volumes. They have the power to independently influence exchange rates.
Dealing centers are basically intermediaries through which anyone can trade; these companies accept applications from ordinary traders and transfer them to large Forex companies.
If you wish, you can start trading currencies yourself; to do this, you just need to choose a Forex dealing center.
DCs can also independently create their own trading platforms and ensure the liquidity of currencies; in this case, trading is carried out within the company, but using real forex quotes.
Traders are investors who invest their money and trade Forex; almost anyone who has a small amount of money (literally a couple of dollars) can become a trader. To work on the foreign exchange market, you just need to register with one of the Forex brokers and download the necessary software.
Using a trading terminal, a trader opens an order to buy or sell a currency, the order is transmitted to his dealing center, which in turn transmits the order to its representative on the exchange.
It is not difficult to understand how the foreign exchange market works; the main thing is to correctly understand its entire structure and the process of carrying out operations.