Forex trading holidays refer to specific dates when the forex market experiences reduced trading activity or is closed due to public holidays in major financial centres. While the forex market itself operates 24 hours a day, five days a week, trading volumes often drop during holidays, impacting liquidity and volatility.

Key Takeaways

• Forex markets generally close on weekends (Saturday and Sunday)
• Trading volumes decrease significantly during public holidays of major economies
• Liquidity and volatility may be lower, leading to wider spreads
• Awareness of forex holidays helps traders plan and manage risk
• Holidays vary by country and affect currency pairs related to those economies

Major Forex Trading Holidays

CountryCommon Public Holidays Affecting Forex Trading
United States	New Year’s Day, Independence Day, Thanksgiving, Christmas
United Kingdom	New Year’s Day, Good Friday, Christmas, Boxing Day
Japan	New Year, Golden Week, Emperor’s Birthday
Australia	Australia Day, ANZAC Day, Christmas
Canada	Canada Day, Labour Day, Christmas
European Union	Christmas, New Year’s Day, Easter

Impact of Holidays on Forex Trading

• Lower Liquidity: Fewer participants lead to thinner order books
• Wider Spreads: Brokers may widen spreads to manage risk during low activity
• Reduced Volatility: Price movements may be subdued or erratic
• Risk of Gaps: Markets can gap open after holidays due to overnight news

Planning Around Forex Holidays

• Check economic calendars for upcoming holidays in major markets
• Avoid opening large positions before long holiday weekends
• Adjust stop losses to account for potential increased volatility
• Use demo accounts to observe holiday trading behaviour

Case Study: Trading Around Christmas Holiday

Emma noticed that during the Christmas period, GBP/USD spreads widened and price movement slowed. She reduced her trading size and tightened risk management. This cautious approach preserved her capital during thin market conditions, a lesson learned from a CPD Accredited Forex Course.

Tips for Traders

• Stay informed about global public holidays affecting forex markets
• Use lower leverage during holidays to reduce exposure
• Avoid trading during major holiday closures if possible
• Monitor broker announcements for altered trading hours

Frequently Asked Questions

Is forex trading closed on public holidays?

The forex market is open 24/5, but activity significantly reduces on public holidays in major financial centres.

Which forex pairs are most affected by holidays?

Currency pairs involving the country on holiday tend to have lower liquidity and wider spreads.

Can I still trade forex on holidays?

Yes, but expect lower volume, wider spreads, and potentially erratic price movements.

Do brokers change trading hours during holidays?

Some brokers adjust their trading hours or widen spreads to manage risk during holidays.

How should I manage risk during forex holidays?

Reduce position sizes, use stop losses carefully, and avoid trading volatile news during thin markets.