Business

Pro's:1. The trader can respond to currency moves caused by economic, social and political events at the time they occur. This is a huge advantage the forex market has over any other markets. If a company listed on the NYSE is scheduled to release quarterly earnings after the close of the market (as they almost always do), owners of the stock cannot react to the data (since there is no after hours trading) and may suffer
huge losses depending if they are short or long the stock once the market opens again the day after.

2. A trader has the opportunity to have an active market no matter what part of the world he or she lives in. As an example, if someone living in Australia would like to trade the US stock market they would have to be awake all night because of the time differences. Not so with the FX market.

3. Different times within the 24 hour period provide opportunity for different strategies. As an example, during the European and US sessions the market tends to be quite volatile allowing the trader to take advantage of big moves in currency prices. In the Asian session the market tends to range meaning the trader could play range strategies (don’t worry, we will cover the meaning and significance of these
strategies later on in the course).

Con's:
1. For the small trader who is most of the times trading alone (unlike banks for example who have traders 24 hours a day viewing and analyzing the market) it is impossible to take advantage of all the action that takes place. For example, if a
trader lives in New York and a big move starts in the specific pair he or she is trading during the mid European session he or she would probably miss it (remember the time differences).

2. Some periods within the 24 hour day present low trading interest from the various market participants which means very small moves, no liquidity and sometimes (depending on the broker the trader works with) widening of the bid/ask spread.