Why Is the Forex Market Closed on Saturday and Sunday

The Forex (Foreign Exchange) market is the largest and most liquid financial market in the world. It operates 24 hours a day for five consecutive days, but it remains closed on Saturday and Sunday. 

Have you ever wondered why? Let’s understand the reason behind this global practice.

Forex Market Trading Hours

The Forex market stays open 24 hours from Monday to Friday, thanks to its decentralized structure and different time zones worldwide. The market operates through four major trading sessions:

 Sydney Session

 Tokyo Session

 London Session

 New York Session

These sessions overlap at certain times, keeping the market active and liquid throughout the week.

Why Is the Forex/Financial Market Closed on Weekends

1. Banks and Financial Institutions Are Closed

The Forex market runs mainly through large banks and financial institutions. On weekends, these entities remain closed, cutting off the major source of liquidity.

2. Low Trading Volume

During weekends, very few traders remain active, leading to extremely low market liquidity and volatility. This makes trading risky and inefficient.

3. Operational Maintenance

Many brokers and liquidity providers use weekends for server maintenance and system updates, ensuring smooth market operations during the active trading week.

4. Global Market Protocol

It is a global trading standard to keep the Forex market closed from Friday night to Monday morning, maintaining consistency across different countries and financial centers.

Can You Trade Forex on Weekends

While the standard Forex market remains closed, some cryptocurrency pairs and Over-the-Counter (OTC) trading platforms offer limited trading options during weekends. However, this is not part of the official Forex market.

Conclusion

The Forex market being closed on Saturday and Sunday is a global practice that ensures market balance and system stability. For traders, the weekend is a valuable time to review market movements, analyze performance, and plan strategies for the upcoming week.

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