Best Days of the Week to Trade Forex
All in all, Tuesday, Wednesday and Thursday are the best days for Forex
trading due to higher volatility. During the middle of the week, the
currency market sees the most trading action. As for the rest of the week,
Mondays are static, and Fridays can be unpredictable.
Below is a chart of average pip range for the major pairs for each day of the week:
As you can see from the chart above, it would probably be best to trade
during the middle of the week, since this is when the most action
happens.
Fridays are usually busy until 12:00 pm EST and then the market pretty
much drops dead until it closes at 5:00 pm EST. This means we only work
half-days on Fridays.
So based on all these, we've learned when the busiest times of the market
are. The busiest times are the best times to trade because they give you a
higher chance of success.
Best Times to Trade:
When two
sessions are overlapping
of course! These are also the times where major news events come out to
potentially spark some volatility and directional movements. Make sure you
bookmark the
Market Hours
sheet to take note of the Opening and Closing times.
The
European session
tends to be the busiest out of the three.
The middle of the week typically shows the most movement, as the pip range widens for most of the major currency pairs.
Worst Times to Trade:
Weekends:
The worst time to trade Forex, the first comes late Sunday and half of
Monday, as mentioned before. At this period of time, everyone is still
slow, sleepy and or re-assessing/forecasting the market direction ahead of
the trading week. Nobody trades on weekend, and you should not as well.
Major news releases:
The other worst period for Forex trading includes major news releases,
whether it is financial reports, economic data, or political updates.
Such major news can have an unexpected and unpredictable effect on Forex
market. Such releases can be easily tracked in Forex
economic calendar. In case you are not following this news, you are risking your funds.
Fridays:
Most of the traders close their Forex positions on Friday. This is done
in order to avoid the opening gaps of Monday. The traders prefer not to
hold any open positions over the weekend, as the
liquidity
and market are on the slowdown.
What are the best times to trade forex?
The forex market runs on the normal business hours of four different parts
of the world and their respective time zones. The
U.S./London markets overlap
(8 a.m. to noon EST) has the heaviest volume of trading and is best for
trading opportunities.
Which month is best for forex trading?
This makes autumn months the best time of the year to trade Forex. By
the second half of December, trading activity slows down - much like in
August. The few weeks before and after Christmas are the slowest. It's
not until mid-January that the markets start to pick up.
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