Understanding the Closing Rates of the Forex Market
The forex market is a market where the world’s currency is traded by governments, banks, institutional investors and speculators. The forex market is the largest market in the world and open 24-hour market. Currencies are traded from different parts of the world.
The forex market is open starting 05:00 EST on Sunday and lasts until Friday 05:00 EST, runs 24 hours a day during this time. Or if using WIB, starting Monday at 04:00 am until Saturday 04:00 pm. No trading activity during the market is closed from Saturday 04:00 WIB to Monday 04:00 WIB.
The opening price for Monday is the initial trading price on Monday and the weekly closing price is the last trading price on Saturday. So during the week the market is open (early Monday to Saturday morning), there is actually no forex closing price because there is always at least one open market in several places in the world at any time.
However, we often hear quotes for the opening and closing prices for currency pairs in financial media. For example, a news article might state how the US dollar closed down against the Canadian dollar during trading Wednesday. The price quoted is the closing price for the individual market in the forex market. There are three main areas – North America, Asia and Europe – and each has several forex markets. In North America, the main market is in New York, the main Asian market is in Tokyo and the main market in Europe is in London. There are many other individual markets in areas that are part of the forex market, and each individual market has its opening and closing (not trading for 24 hours a day). For example, the New York market, trading starts from 20:00 pm to 03:00 pm. The closing price will refer to the closing price of the New York forex market.
For forex traders, the closing price to see the strengthening or weakening of a pair in daily trading. Such as, opened 04:00 pm dawn until 4:00 pm dawn the next day. The trick, is to see if the yesterday’s closing price is higher or lower than the previous closing price. Usually will be mentioned in the percentage of mischief or decline.