As a general rule, there is no limit to how long you can keep a trade open.
Some brokers might put limits, but any reputable Forex brokers won’t. As long as there is a market, theoretically, you could keep your trade open forever.
Now, just because you can, it doesn’t necessarily mean it’s a good idea.
Especially for most FX traders who are in the market to make money off of changes in value in different currencies.
You don’t “cash in” until you close a trade, so at some point, you’re going to have to do that in order to make money.
Join our responsible trading community - Open your Orbex account now!
Is There a Reason to Keep Trades Open for a Long Time?
Yes. Well, there was, but with interest rates around the world going to near zero, the motivation has virtually vanished for most retail FX traders.
With larger interest spreads, some traders would engage in carry trading as a form of making a profit from their account.
How this works is depending on the interest rates of the currencies being traded, you can be paid a “rollover” interest on your margin.
If the interest rate differential is big enough, and the currency is relatively stable, you can make a steady income from the trade. So, those carry FX traders would keep their positions open for extended periods of time, up to years.
Speaking Practically Today?
Unless you are into carry trading, there isn’t much practical reason to keep a trade open for really long periods of time.
You’re generally looking to get a profit from a move in the Forex market, and once that move has completed, you’re going to close the trade.
That can take different amounts of time depending on your trading style:
- Scalpers
Generally, scalpers are looking to get a few pips out of short moves in the markets. They trade on time frames generally below M15. Usually, they won’t hold a trade for more than an hour or two at most. - Day Traders
Typically, day traders are looking at capitalizing on a technical trend. They will generally cluster around the M30-H4 time frame charts. They’ll also usually complete their trades within a day (hence the name, day trader), often within a single “session” of up to six-ish hours. - Swing Traders
These FX traders are looking to ride a trend, more often it’s a fundamental move. Usually, they stick to H4-M1 time frame charts and can be in a trade for a few days to a few months. Rarely a trend will last over a year, so it’s not common, but swing traders to on occasion have year-long trades.
Of course, depending on your style, you likely won’t fit neatly into one of those boxes.
Some FX traders have multiple styles, for example opening the occasional swing trade while being generally focused on day trading.
Opportunity Cost
The thing is, when you open a trade, you’re putting a certain amount of your capital in the market, which means you can’t use it for other trades. As a matter of capital efficiency, you don’t want to keep your trades open for longer than strictly necessary. The longer the trade is open, the more it is exposed to risk as well.
In the end, while brokers and the market don’t put any artificial limits on how long you keep your trade open, they aren’t really necessary because the practical needs of Forex traders mean almost all trades close as quickly as possible.
[optin-monster-shortcode id=”br9d5szjejc7bancki3f”]
FAQs
As a general rule, there is no limit to how long you can keep a trade open.
How long can you leave a forex trade open? ›
Let's start by taking a look at how long it's possible to keep a trade open. You can hold a trade for as long as you want, as long as your broker is still in business and you are able to fulfill the margin requirements in your account. This holding time can range anywhere from a few seconds to a few years.
What is the time limit for Forex trading? ›
The forex market opening time in India is from 9.00 a.m. to 5.00 p.m., with cross-currency trade continuing till 7.30 p.m. However, liquidity and variability are not always consistent over India's currency market hours. They differ due to overlapping trade sessions all around the globe. This has already been mentioned.
How long is the forex market open? ›
Forex trading hours around the world
The forex market is open 24 hours a day, from Sunday evening until Friday night. This is due to the various international time zones which allow you to trade all hours of the day. There are major trading sessions in these three locations: Tokyo (Asian session)
How long does Forex trading last? ›
The Forex market is open for 24 hours from Monday to Friday before it closes for weekends. That is 120 hours of trading time every single week. So for any trader looking for a payout, there is plenty of time to look for opportunities.
Do forex trade close automatically? ›
A stop out in Forex usually happens at the 50% margin level. In real numbers, it means that the funds on the account are half the size of the funds taken by the broker. And at this point, the positions will be closed automatically until the margin level goes above 50%.
What happens when I leave my forex position open overnight? ›
In Forex, when you keep a position open through the end of the trading day, you will either be paid or charged interest on that position, depending on the underlying interest rates of the two currencies in the pair.
Can I hold forex for months? ›
In the forex market, a trader can hold a position for as long as a few minutes to a few years. Depending on the goal, a trader can take a position based on the fundamental economic trends in one country versus another.
How many hours a day can you trade forex? ›
Unlike the stock market that closes for hours each night, forex markets are available to trade for 24 hours most days. This is possible because currency trading involves a network of exchanges operating constantly throughout global market sessions.
Does forex have a day trading limit? ›
The Forex market operates differently, with no minimum account balance or restrictions on the number of day trades.
The ability of the forex market to trade over a 24-hour period is mostly due to different international time zones and the fact that trades are conducted over a network of computers rather than any one physical exchange that closes at a particular time.
When should you stay out of the forex market? ›
While the forex market is a 24 hours a day, 5 days a week market, there are certain situations when you should stay on the sideline. These include bank holiday hours, high impact news, important central bank meetings and illiquid market hours.
Can you trade forex at night? ›
Unlike Wall Street, which runs on regular business hours, the forex market runs on the normal business hours of four different parts of the world and their respective time zones, which means trading lasts all day and night.
How long can I keep my forex trade open? ›
As a general rule, there is no limit to how long you can keep a trade open. Some brokers might put limits, but any reputable Forex brokers won't. As long as there is a market, theoretically, you could keep your trade open forever. Now, just because you can, it doesn't necessarily mean it's a good idea.
Do forex trades expire? ›
Forex options trade over-the-counter (OTC), and traders can choose prices and expiration dates which suit their hedging or profit strategy needs. Unlike futures, where the trader must fulfill the terms of the contract, options traders do not have that obligation at expiration.
Is forex coming to an end? ›
Forex is likely going to last. It has so many attractions that make it difficult to ignore. The sheer volume of transactions, the highly diverse trading parties, its benefits for individual traders, and its impact on the global economy make it a long-lasting market.
Can forex be traded all day? ›
The forex market is open 24 hours a day during weekdays but closes on weekends. Because this market operates in multiple time zones, it can be accessed at any time except for the weekend break.
When should you close a forex position? ›
Closing a trade in the forex market means ending a position to realize gains or minimize losses. Traders typically close positions when they achieve their gain targets, encounter changes in market conditions, or when their initial analysis proves incorrect.
