Every week, we bring you bite-sized insights into popular assets and trending topics to help you navigate the investment world with ease.
In this edition of Markets in Focus, we take a closer look at Forex - the foreign exchange market.
What Makes Forex So Attractive to Traders?
- 24/5 Market: Unlike stock markets with fixed hours, forex is available around the clock (Monday through Friday), allowing traders to react to news and price changes at any time.
- CFDs for Flexibility: Many traders use CFDs (Contracts for Difference) to trade forex. CFDs enable speculation on both rising and falling currency pairs without having to own the underlying asset.
- High Liquidity & Volatility: With major currency pairs being highly liquid, traders can use leverage to amplify their positions - but this also increases risk.
Why Is the Forex Market Open 24/5?
- No central exchange: Forex doesn’t operate on a centralized exchange. Instead, it is traded over-the-counter (OTC) among major global banks.
- Time zone overlap: Because these banks are spread across continents, trading takes place in overlapping sessions:
- When the Asia-Pacific session (Sydney, Tokyo) is active, liquidity picks up for currencies like JPY, AUD, and NZD.
- During the European session, when London overlaps with Tokyo and New York, liquidity spikes - especially for EUR/USD and USD/JPY.
- Later, when New York opens, volume surges again.
- This cycle repeats seamlessly throughout the week until Friday evening, when the market winds down.
When Are Forex Volumes the Highest?
- European afternoon: The overlap between the London and New York sessions sees the highest trading volume.
- Evening: Activity slows as European markets close.
- End of day / start of new day: Wall Street remains busy until around 11:00 PM, while Australia is already starting its next trading day.
- This rhythm continues through the week until Friday around 10 PM, when traders typically close out positions for the weekend.
How to Leverage Forex Trading
- Leverage: One of the biggest draws of forex is the ability to use leverage - amplifying both potential profits and losses.
- Example: Suppose you buy 1,000 EUR/USD at 1.0900 using 30x leverage.
- If the rate moves to 1.1100, you could make a $20 profit per pip, but multiplied by 30x that’s $600 in total.
- But if the EUR weakens, losses are similarly magnified.
Trade Forex 24/5 with Change
With the Change App, you can trade forex 24 hours a day (Monday–Friday) using leverage up to 30x. Explore a broad range of currency pairs and seize opportunities any time during the trading week.
Trade smart. Manage your risk. Stay informed.
We wish you a successful trading week on Change.
Until next week!
