While the forex market is open 24 hours a day, there is such a thing as the best day of the week to trade forex.
When is the best time to engage in foreign exchange trade? It should be at the time when the market is said to be most liquid. It is also crucial to determine the currency’s state of unpredictability. Volatility refers to changes in pricing during a given period of time. The answer depends on the day of the week and time of day the trading is taking place. Once you depend on current intraday price history and your broker is based in the United States, keep out of the market on Sundays. The best forex brokers in the U.S. let pass one hour of trading every Sunday which means that their charts are not fully accurate.
Foreign Exchange Market Trading Days
While exchange trading hours are round-the-clock not to include weekends, this does not indicate that you need to spend sleepless nights observing the movements of charts. There are weekdays where there is limited activity and you can stay out of the market during these times. You can look forward to positive returns from the business of currency exchange trade when there is a lot of activity in the market. It is a waste of time to try to place trades when the market is not making any headway.
Under normal circumstances, the forex market is filled with activity during the middle of the week which is from Tuesday until Thursday. Less activity frequently takes place on Mondays since most traders have not opened their positions yet. Fridays are often bristling with activity until 12:00 pm (Eastern Standard Time). The market starts moving at very slow pace after this time until it closes at 5:00 pm (Eastern Standard Time). In other words, the weekend of the forex market trader begins early. It is not possible to trade during the weekends since most brokers usually close their foreign exchange trading platforms.
You need to learn the beginning and end times of different sessions.
- London session hours – 8:00 to 17:00 GMT
- New York session hours – 1300 to 2200 GMT
- Sydney session hours – 2200 to 7:00 GMT
- Tokyo session hours – Midnight to 9:00 GMT
However, these times are only guidelines since traders can opt to start their day earlier.
Avoid Trading during News Time
Consider news time before you engage in currency exchange trading. The greater impact that a news event has on the currency pair you are trading, it is practical to wait until after the news has passed before adopting a position. This is particularly true for the Non Farm Payroll report which is customarily released on the first Friday of each month. Even veteran traders avoid this because instability may increase several times than the average and price direction can change considerably. The rule is to wait at least five minutes after the NFP release before foreign currency exchange trading. The price may vary in expectation of the news. Use a range-oriented strategy if you want to engage in trade during these times. If you are not capable of trading when there is high activity in the market, you can be a long-term trader. Employing this method means that you can open positions and leave them to run for days or weeks. Therefore, you will not have to wait for the best days of the week to do forex trading.