Market Holidays: A Calendar That Changes Your Spreads

[Fairman]

Market Holidays: A Calendar That Changes Your Spreads

Forex is open nearly all week, but holidays reduce activity in ways that matter.

When a major financial center is closed, liquidity falls. A US bank holiday, such as Thanksgiving or Independence Day, leaves London and Asia active but New York quiet. Spreads on dollar pairs can widen, and price may drift or spike on thin volume.

Christmas and New Year are the extreme cases. In the days around them, many participants are away, and conditions can be erratic. Brokers may close early, change trading hours, or raise margin requirements. Spreads can widen dramatically, and stop orders may slip.

Individual currencies feel local holidays too. Japanese Golden Week affects yen liquidity, and Chinese New Year affects Asian pairs. For exotic pairs, local holidays can leave the market almost empty.

Practical preparation is simple. Check the market holiday calendar at the start of each month, and note the dates for countries behind your pairs. Review your broker's announcements about holiday hours. And adjust your behavior: reduce size, widen stops, or skip trading entirely if your strategy depends on tight spreads.

Remember that data releases still occur on some holidays in other countries, creating moves with low liquidity.

Note the effect on swap too, as rollover days around holidays can include multiple days of interest.

Practical step: write the next three months of major holidays for your pairs' countries into your calendar now.

[Fairman]

US holidays are the sneaky ones for dollar pairs. London is open so the chart looks normal at first, then the afternoon goes dead and spreads widen right when you'd normally be trading the overlap.

[Fairman]

Check your broker's email or news page the week before big holidays. Changed trading hours and early closes are usually announced there, not on the platform itself.