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TheCapitalManager

What is a “good” Time to Trade Forex?

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Here we will be going to take a look what are the best months of the year and the best days of the week to trade forex. The foreign exchange market is open 24 hour for 5 and a half (Sunday) days a week around the whole year. But there are certain times when it is more attractive to trade.

 

Best Months to Trade

 

The worst months for trading are certainly the summer months of June (second half), July and especially August. Many institutional traders in Europe and North America are on vacation which results in less trading activity in general, drying up of trading volume and smaller swings in currency pairs.

 

If you trade during the summer months you will have to take into consideration that prices will be range-bound for a long time and get rather unpredictable. Starting in September – usually after Labor Day in the US – trading activity picks up again as traders return to their desks. Then the best three months of the year follow until volume dries up again in the second half of December as traders take extended Christmas holidays. From January until May it is also very good to trade as we usually witness good swings during these months.

 

Just be very cautious during the summer period and during the second half of December. What normally works in “normal” conditions might not work during these low volatility months.

 

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Best Days to Trade

 

While the Forex market already opens on Sunday evening Central European Time (Monday morning in New Zealand and Sydney) it is not recommended to start your trading week on Sunday already. Unless there was major news over the weekend there won’t be much going on as volumes and volatility are usually at an extreme low on Sunday evening.

 

Monday can also be very difficult to trade as many traders – especially in Europe – wait for economic news and macro data before they put up new positions. Trading ranges on Monday are usually smaller on average compared with the other days of the week. Tuesday, Wednesday and Thursday are considered to be the best days of the week for forex trading. These three days are usually the days which get the most action. If you want to trade only three days a week and spend the rest of the week at the beach you should chose these three days.

 

The first half of Friday is also pretty decent for trading but please be aware that volumes dry up in the second half of the day as traders head for the weekend. Be also aware of the fact that on Friday trends which have persisted for the whole week can be reversed on Friday’s as traders close their positions to avoid the weekend risk. You should be especially cautious on the first Friday of each month as this is the day when the non-farm payroll report from the US is due. This data usually leads to erratic swings in all major currency pairs, especially in the dollar related pairs.

 

If there is a holiday in more than one major financial center such as Easter Monday or Christmas we usually also witness a drying up of volumes and sometimes erratic swings. Be especially careful on these major holidays as most of the big traders are off their desks. If you avoid these low volatility days you will usually diminish potential frustration and boost your performance.

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I dont know about you guys but summer trading is great, exotics trend and keep moving in the same direction til 'activity' picks up then they can reverse steeply to make up for the lack of volume. :2c: If you look at past charts this activity can be evidently seen, (e.g. look at eur/usd starting july 2013, once wall st. takes vacation usually july-august, eur-usd volume drops, but the trend goes on till volume picks up and drops steeply, very common summer trade for me

Edited by Capt. Sum Ting Wong

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it really depends on lots of factors, your time zone, main pairs you trade etc, so its different from one person to another, and certain markets affect each pair differently so basically it really depends on the traders, i trade majors mainly on the uk ny markets on hotforex, thats where im comfortable trading and it can be different for other traders

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A significant advantage in forex trading is the ability to trade for twenty four hours each day throughout the week. However, the trading day consists of multiple trading sessions: the European session, American session and the Asian session – also known as the London, New York and Tokyo or Sydney sessions. This is because there is no single exchange in the forex market and different countries trade at different times.

 

An advantage in forex trading is the ability to trade for twenty four hours each day throughout the week.

When the traders in London have stopped trading for the day, the traders in New York continue. When the traders in New York stop trading for the day, then the traders in Sydney begin.

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The best times are when volume and volatility lever are it;s peak high. high volume means more transaction lot been made of a particular currency (more buyer/seller), as high volatility means currency moving faster and trending quickly. high volume combine with strong volatile market cause larger pips movement, as the spread narrower. it may occur during each session collide, or best fit at high impact news release.

sometime, well define good time are not enough, many traders should suffer from bad trading condition during market best time to trade, other may fall into widen slippage. this where brokers trading condition are crucial, even a 10 cents discount commission are very valuable one, a round turn 3.8$ instead of 4$ on my Tickmill account, an extra advantage, especially when average entry over 100 trades executed at monthly basis. :missy:

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Here we will be going to take a look what are the best months of the year and the best days of the week to trade forex. The foreign exchange market is open 24 hour for 5 and a half (Sunday) days a week around the whole year. But there are certain times when it is more attractive to trade.

 

Best Months to Trade

 

The worst months for trading are certainly the summer months of June (second half), July and especially August. Many institutional traders in Europe and North America are on vacation which results in less trading activity in general, drying up of trading volume and smaller swings in currency pairs.

 

If you trade during the summer months you will have to take into consideration that prices will be range-bound for a long time and get rather unpredictable. Starting in September – usually after Labor Day in the US – trading activity picks up again as traders return to their desks. Then the best three months of the year follow until volume dries up again in the second half of December as traders take extended Christmas holidays. From January until May it is also very good to trade as we usually witness good swings during these months.

 

Just be very cautious during the summer period and during the second half of December. What normally works in “normal” conditions might not work during these low volatility months.

 

do.php?img=500

 

Best Days to Trade

 

While the Forex market already opens on Sunday evening Central European Time (Monday morning in New Zealand and Sydney) it is not recommended to start your trading week on Sunday already. Unless there was major news over the weekend there won’t be much going on as volumes and volatility are usually at an extreme low on Sunday evening.

 

Monday can also be very difficult to trade as many traders – especially in Europe – wait for economic news and macro data before they put up new positions. Trading ranges on Monday are usually smaller on average compared with the other days of the week. Tuesday, Wednesday and Thursday are considered to be the best days of the week for forex trading. These three days are usually the days which get the most action. If you want to trade only three days a week and spend the rest of the week at the beach you should chose these three days.

 

The first half of Friday is also pretty decent for trading but please be aware that volumes dry up in the second half of the day as traders head for the weekend. Be also aware of the fact that on Friday trends which have persisted for the whole week can be reversed on Friday’s as traders close their positions to avoid the weekend risk. You should be especially cautious on the first Friday of each month as this is the day when the non-farm payroll report from the US is due. This data usually leads to erratic swings in all major currency pairs, especially in the dollar related pairs.

 

If there is a holiday in more than one major financial center such as Easter Monday or Christmas we usually also witness a drying up of volumes and sometimes erratic swings. Be especially careful on these major holidays as most of the big traders are off their desks. If you avoid these low volatility days you will usually diminish potential frustration and boost your performance.

 

I think it depends on the country one is in and the world economy in general. One should consider this mostly when deciding the best time to trade.

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Most forex traders should trade during the late-US, Asian, or early-European trading sessions— essentially 2 pm to 6 am Eastern Time (New York), which is 7 pm to 11 am UK time.For most forex traders, the best time of day to trade is during a specific continent’s market hours when European currency pairs such as EUR/USD show the best results.

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