Forex has one important difference from other markets. It is available for trading at any time of the day during the entire working week. And novice traders use this opportunity, as they say, to the fullest. They try to trade almost round the clock, believing that in this way they can earn a lot and quickly.
But experienced traders know that this should not be done. There are times when it is better to give up trading. You need to know about them and take into account in terms of your trading. The timing of forex trading can have a significant impact on the final results. Therefore, it will be useful for a novice trader from the first steps to orient their trading to specific days of the week and time periods within the day.
Today I will tell you about it.
When is it better not to trade
If we consider the days of the week, then Tuesday, Wednesday and Thursday are the best days to trade. Why are Monday and Friday blacklisted? These days have their own characteristics that are not conducive to effective trading. As you know, Monday is a hard day. And for forex traders too. On this day, they are only included in the work after resting at the weekend. And they do it without much haste. Therefore, there are few transactions on the first day of the week, which means that the volatility will be quite low. It is difficult to make money in such a market. And it will be better to start trading the next day. As for Friday, trading on this day is also not recommended. On Friday, many market participants prefer not to open trades. Leaving them until Monday is undesirable, as this increases the risks. Not always, but still it happens that the week starts with a gap. Due to the fact that the number of transactions on Friday is decreasing, the market liquidity is also decreasing, which means that the trading efficiency will be weak. Three days a week for active trading is enough to make good money.
When choosing periods for trading, you need to take into account the time of release of important news. To make money, you need a fairly high volatility in the market, but, as they say, within reasonable limits. And at the moment of publication of important news, the rate of price change in the market can be very high. In such a situation, you can quickly earn a large amount of profit. But you can also lose your funds in a matter of minutes. Especially if the trader is trading without a stop. In this regard, I would advise traders with little trading experience to stay out of the market during the news release. This is a bad time for Forex trading.
The foreign exchange market provides us with great opportunities for earning. But in order to reduce risks, it is necessary to determine the optimal time for trading for yourself, taking into account the known features of the market.