This article aims to discusses some observations about trading on Forex market open and closes, in particular Tokyo, London, Germany and the New York Stock Exchange, focused on which may be of particular interest. All of these events can trigger liquidity changes which can affect the movement of a Forex pairs. London and Germany closes are of interest, because London closes one hour after Frankfurt. So one significant liquidity change leads into another change, shortly afterwards. The close of the New York Stock Exchange happens later, but it can have some effect on Forex pairs, particularly EUR/USD.
But is there a difference in general between market open and market close. It might be expected that there is. Market opens can be characterised by surges in liquidity, whiles closes tend to have a reduction in liquidity, perhaps preceded by strong moves. Because there is a potentially quiet time between the end of New York and Tokyo open, then there is the potential for a kind of restart of what happened in the New York session. This can be seen as the quietness coming alive, becoming more pronounced and volatile as market open approaches, leading perhaps into a change after the moment of opening.
The opening of New York can be characterised by very strong liquidity changes indeed, especially if there is some excitement in the market. This may support structured if somewhat wild trends, with powerful surges. However New York close may not affect pairs that much. It can be seen that close may change a direction, but this affect may not repeat itself or be particularly noticeable (perhaps because of the influence of the stock market). Frankfurt close can be a more pronounced effect, but with some similarities. This site has catalogued the nature of these potential changes, but in short they include a micro trend in the run up to close, perhaps altering shortly after close (but these features will tend not to be repeated from session close to session close). London may see some kind of accentuation of this.
In can be said though that what matters is not the importance of the market, but the potential for change affected on the market, which is a general statement that can be made about the Forex market. This enables a path to be created from all possible outcomes, at that moment. So in a way expecting this market condition to exist from session to session is expecting the unlikely, as by definition the next session reduces the potential for change, as it contains within it the expectations of the previous session. Obviously this would result in nothing happening at some point, which is not the case, as the market is introducing change with liquidity and the events of the market itself. This is why regularities can appear, but not be repeated at the next session.
So to sum up, market opens and closes have the potential to affect change on the market, but by their nature, they can also result in differing outcomes, as the time is set and expected. This said the time around open and close creates a range for different kinds of effects to be evident, shaped by the influence of liquidity change. What this really means is that market open and closes can create regularities, as factors to create and shape patterns appear, but as with all regularities, unpredictable in terms of when and if a particular pattern (taken in a broader sense) appears.
