A:

The foreign exchange market, or forex, is the market in which the currencies of the world are traded by governments, banks, institutional investors and speculators. The forex is the largest market in the world and is considered a 24-hour market because currencies are traded around the world in various markets, providing traders with the constant ability to trade currencies. The forex opens at 5pm EST on Sunday and runs until 5pm EST on Friday, running 24 hours a day during this time. But between the Friday close and the Sunday open, the forex market does not trade.

The opening prices for the week are the initial trading prices on Sunday and the closing prices for the week are those of the last trade on Friday. However, over the course of the week, there really are no closing prices for the forex as there is at least one market open at some place in the world at all times.

However, we often hear quotes for the opening and closing prices for currency pairs in the financial media. For example, a news article might state how the U.S. dollar closed down against the Canadian dollar during trading on Wednesday. The price being quoted is the closing price for an individual market within the forex market. There are three main regions - North America, Asia and Europe - and within each there are several forex markets. In North America, the main market is in New York, in Asia it is in Tokyo and in Europe it is in London. There are many other individual markets within these regions that are part of the forex market, and each individual market has an open and close (i.e. does not trade 24 hours a day). The New York market, for example, trades from 8am EST until 3pm EST. In North American media, the closing price will often refer to the closing price of the New York forex market.

While these quotes give financial-media users a sense of the current market, the quotes are not as accurate as the actual current market price. For any forex trader, the best forex closing price to use is the closing price of his or her transaction.

For more information on the forex market, read Getting Started in Forex and A Primer on the Forex Market.

RELATED FAQS
  1. How does the foreign-exchange market trade 24 hours a day?

    The forex market is the largest financial market in the world, trading around $1.5 trillion each day. Trading in the forex ... Read Answer >>
  2. Can I trade a currency when its main market is closed?

    In the forex market, currencies from all over the world can be traded at all times of the day. The forex market is very liquid, ... Read Answer >>
  3. How is the value of a pip determined?

    Learn how the pip is used in the pricing of a currency pair in forex trading, and see how the foreign exchange market is ... Read Answer >>
  4. What methods can be used to fund a forex account?

    The forex market is where currencies from around the world are traded. In the past, currency trading was limited to certain ... Read Answer >>
  5. What am I buying and selling in the forex market?

    The forex market is the largest market in the world. According to the Triennial Central Bank Survey conducted by the Bank ... Read Answer >>
  6. How do you make money trading money?

    Investors can trade almost any currency in the world. Investors, as individuals, countries, and corporations, may trade in ... Read Answer >>
Related Articles
  1. Trading

    The Pros & Cons Of A Forex Trading Career

    Trading foreign currencies can be lucrative, but there are many risks. Investopedia explores the pros and cons of forex trading as a career choice.
  2. Trading

    The Forex Market: Who Trades Currency And Why

    The forex market has a lot of unique attributes that may come as a surprise for new traders.
  3. Trading

    Working In Finance: 5 Forex Careers

    The forex markets can be both exciting and lucrative. Find out what jobs exist in this space and how to get them.
  4. Trading

    Forex or Stock Trading: Which Works For You?

    Even though the odds favor stock trading, forex trading has several advantages to offer a particular type of investor.
  5. Trading

    Can Forex Trading Make You Rich?

    Forex trading may be profitable for hedge funds or unusually skilled currency traders, but for average retail traders, forex trading can lead to huge losses.
  6. Trading

    10 Ways To Avoid Losing Money In Forex

    When approached as a business, forex trading can be profitable and rewarding. Find out what you need to do to avoid big losses as a beginner.
  7. Financial Advisor

    What Is A Pip?

    Learn how this measure of change is used in trading currencies on the forex market.
  8. Trading

    Forex Trading: A Beginner's Guide

    Learn about the forex market and some beginner trading strategies to get started.
  9. Trading

    Understanding Forex Quotes

    When trading in forex, all currencies are quoted in pairs. Find out how to read these pairs and what it means when you buy and sell them.
  10. Trading

    Should You Trade Forex Or Stocks?

    Deciding which markets to trade can be complicated, and many factors need to be considered in order to make the best choice.
RELATED TERMS
  1. Foreign Exchange Market

    The market in which participants are able to buy, sell, exchange ...
  2. Forex Market

    The market in which participants are able to buy, sell, exchange ...
  3. Forex Spot Rate

    The current exchange rate at which a currency pair can be bought ...
  4. Forex Market Hours

    The hours during which forex market participants are able to ...
  5. Forex Option Trading

    A security that allows currency traders to realize gains without ...
  6. Forex Account

    The type of account a forex trader opens with a retail forex ...
Hot Definitions
  1. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  2. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  3. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  4. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
  5. Job Market

    A market in which employers search for employees and employees search for jobs. The job market is not a physical place as ...
  6. Yuppie

    Yuppie is a slang term denoting the market segment of young urban professionals. A yuppie is often characterized by youth, ...
Trading Center