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Bfbusa

Trading on Mondays and Fridays

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Why is it so difficult to trade Mondays and Fridays.

 

If you stay away, tell us why.

 

If you trade, do you trade differently than on Tuesday, Wednesday and Thursday? Tell us your thoughts.

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I don't avoid trading on Mondays and Friday's but I certainly expect less from the markets on those days. Generally speaking Mondays and Friday's have been choppy-sideways lately so I would be careful about breakout trading. Seems they are more suited to rangebound trading styles where the larger intraday trend moves tend to happen on Tue-Thu.

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Good question BF.

 

In my years of trading, here's what I've decided - Mon and Fri are no different than the rest of the week. You have no idea going into the week what days will be active and when it won't be. Just when you think you got it pegged, you will be wrong.

 

Few examples...

  • You'll read that before/during/after holidays is a bad time to trade.
  • You'll hear that summer is a bad time to trade.
  • You'll hear that Spring is a bad time to trade b/c Summer is around the corner.
  • You'll hear that trading during lunchtime hours is a bad idea.
  • etc. etc. etc.

And what I have personally found out is that as soon as you make any type of assumption of what the market may do that day, week, or month, it will surprise you. Then your mind plays games with you. I remember when I used to assume that trading before a holiday was bad, so I would avoid it or trade less. Sometimes it was slower, sometimes it wasn't. Now, if I assumed that it was a bad idea to trade, but turned out to be good, then your assumption for what the week after is all messed up now. Let me lay it out like this:

  • You say to yourself no trading before a holiday.
  • You watch the market provide incredible trading opportunities, but you must watch b/c you said no trading.
  • Initially you assumed that the week after would be best.
  • Now, you aren't so sure b/c the week before was best.
  • So, what do you do now? Trade or not? Either way, you will be wrong.

So, after years of playing these games, I said screw it and just trade each day like it was a 'normal' day. You just simply do not know which days will be best for your trading until the day is over. You have to be in the game in order to win.

 

That's what I found out at least. You may find that your trading setups simply are not reliable during certain timeframes and you are the only one that can figure that out. The guys that say don't trade Mondays, Fridays, lunchtime, etc. either know that it does not work for them (so it must not work for anyone) or they've been told not to trade during these times, so they don't.

 

Here's an example from Fri - Fri afternoons are often referred to as a time to avoid. And back in the day, I avoided them b/c everyone said to. Well, on Friday I got a nice +2pt move on the ES that took very little time to occur. Getting +2 on the ES with ease was a great way to end the day.

 

Note - sometimes you'll find that the 'bad' times are some of the easiest times to make quick money. I'll let you figure out why that is...

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Claims about Mondays and Fridays and similar claims usually don't stand up to statistical analysis. Every man and his dog was on Bloomberg TV saying there was going to be profit taking because it was Friday and the end of the month but YM closed at an all time high. I think it's just a case of observer bias like claims that the weather is always bad on a public holiday weekend.

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Claims about Mondays and Fridays and similar claims usually don't stand up to statistical analysis. Every man and his dog was on Bloomberg TV saying there was going to be profit taking because it was Friday and the end of the month but YM closed at an all time high. I think it's just a case of observer bias like claims that the weather is always bad on a public holiday weekend.

 

Excellent points notouch! I forgot about Fri and it being profit taking day! ;)

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I thought of another example of when 'not' to trade that you may hear - don't trade before/during/after econ news. Again, know your markets, but on the US indexes at least, I've found there's no reason to not trade around these times. Sometimes they provide much need volatility and other times the market just ignores them. Again, there's no perfect rhyme or reason here, so you either have to trade all of them or trade none of them.

 

I call it my 'Blackjack Strategy'. On another message board I am on, they recently added an arcade section. It's a more casual board than here. Well, I decided to try my hand at blackjack as I've always enjoyed playing. And my conclusion was simple - you have to play the same hands the exact same way each time if you want a chance at winning. You cannot sometimes hit on 15 or 16, you cannot sometimes hit when the dealer is showing a 10 or face card, you cannot sometimes take blackjack insurance, etc. etc.

 

Trading is no different in my opinion - you must either decide that you will trade Mon, Fri, holidays, econ news, etc. or not. You cannot one day trade these times and the next week not. More often than not, you will be wrong twice. You will be wrong on the times that you do trade them and 'wrong' on the times that you do not. As I found in blackjack, the absolutely critical hands are the tough ones - when you have 12-16 and the dealer is showing a card less than 7. Since the dealer must hit on 16 or lower, how you play your hand is critical. What you do in this scenario must be the same each and every time. Same can be said of trading.

 

Great thread bf!!

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Guest cooter
Why is it so difficult to trade Mondays and Fridays.

 

If you stay away, tell us why.

 

If you trade, do you trade differently than on Tuesday, Wednesday and Thursday? Tell us your thoughts.

 

Bill,

 

Nothing special about Monday, except that Professional Money likes to set the tone for the rest of the week, in my opinion.

 

There's usually a whole bunch of economic reports released on select Fridays, so if you trade the treasury complex, for example, you'll find plenty of volatility and profit opportunities. Plus, there's a lot of profit-taking as traders square their positions for the week.

 

Then again, I think your setups should be valid during RTH no matter what day of the week it is (weekends and holiday periods excepted).

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If you take a risk perspective first in your trading activity, then because of the weekend, economical affairs, and global implications potentially, it's is a more conservative approach to allow Mondays to provide some market direction or non-direction and use these insights to establish your trading bias towards "high odds" trades. Trading can be rewarding everyday of the week, however, if your focus is on "high odds" trading, then realize there is still 4 days left in the week after Monday to trade, don't be in a hurry to compete with the markets first thing Monday mornings!

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I generally put more weight on how the week takes shape starting from the first couple of hours on Monday morning.

 

In other words, I'm far more interested in finding patterns in how the week evolves in terms of performance and P/L than I am in making broad assumptions that certain days are simply "not good to trade".

 

IMO being conscious of what "tends" to happen (statistically speaking) with respect to your personal performance when for instance you get a bad start to the day (or week) is much more significant.

 

What if you could discover for instance that out of the past 3 months, 10 of the 12 weeks that you had bad mondays, your tuesdays were also bad? That to me would be a powerful discovery.

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Why is it so difficult to trade Mondays and Fridays.

 

If you stay away, tell us why.

 

If you trade, do you trade differently than on Tuesday, Wednesday and Thursday? Tell us your thoughts.

 

I don't stay away, I've been in big moves on fridays and even bigger moves on Mondays.

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notouch does touch (arf!) on the statistical basis for discounting any bias toward a specific line of action based on a day of the week, week of the year etc.

 

However...

 

In a bull trend, a Monday 'normally' opens strong carries on into into Tuesday morning with a weakening and/or decline setting in Tuesday afternoon through Wednesday. By Thursday we're back into an advance with a close at the high of the week on Friday. 'Normally' being the operative word, not every week in every bull market.

 

Reverse all of the above for a bear trend.

 

There are also monthly shenanigans on the Monday after the week of the options expiration. But that's a little more detailed and quite another topic.

 

Does anyone else use Jenkins' stuff here?

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I believe it's good to take a day off during the week, it keeps my mind fresh. Before each week I decide what day I will take off and on that day I do something productive like take on a big project with my car. I do something that will keep me busy all day and I stay away from the markets.

 

Fridays have always been my favorite day to trade, not sure why. Ever since I was a little kid watching the markets I would always look forward to Friday to see what the market would do. It has nothing to do with returns or anything like it, it's some kind of psychological thing for me. But to each their own.

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Before each week I decide what day I will take off and on that day I do something productive like take on a big project with my car.

 

Got any pics of your gsx? I used to build and had a few MR2's...85, 87 and my precious 91 hardtop.

 

Anyhow...back to the thread ;)

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