Pipruit: So, as I suspect, we finally, have known all necessary stuff about trading time. May be we should turn to trading directly?
Commander in Pips: Hold your horses, son…
Pipruit: More studying? Noooo!!!
Commander in Pips: Just one final step remains – what about suitability for trading of a particular trading days?
Pipruit: Well, are they might be different?
Commander in Pips: Of course!
Pipruit: In this case, I think, I should be patient for a little while longer…
The same situation is similar on Forex, but it is more typical for price action during the week instead of during the day, because Forex is 24/5 market.
Pipruit: And what should I do then? Do not trade until will see the “power of professionals”? Is it dangerous to trade until that becomes visible?
Today we will take a look at weekly activity.
Ok, here is what I’m talking about – just look in the table:
| Pair | Sunday | Monday | Tuesday | Wednesday | Thurdsay | Friday |
|---|---|---|---|---|---|---|
| EUR/USD | 67 | 112 | 143 | 133 | 148 | 146 |
| GBP/USD | 74 | 152 | 175 | 156 | 168 | 180 |
| USD/JPY | 45 | 63 | 87 | 94 | 123 | 101 |
| AUD/USD | 57 | 81 | 115 | 98 | 117 | 113 |
| NZD/USD | 26 | 85 | 94 | 84 | 99 | 96 |
| USD/CAD | 44 | 96 | 113 | 109 | 123 | 126 |
| USD/CHF | 53 | 87 | 122 | 105 | 104 | 114 |
| EUR/JPY | 22 | 135 | 181 | 162 | 228 | 202 |
| GBP/JPY | 105 | 163 | 219 | 178 | 273 | 238 |
| EUR/GBP | 35 | 72 | 79 | 80 | 76 | 90 |
| EUR/CHF | 36 | 56 | 61 | 69 | 91 | 75 |
Pipruit: Well, it’s absolutely clear, why there is so shallow trading range on Sunday, but, wow, so significant difference in activity between Monday and the middle of the week.
Commander in Pips: That’s right. Also take a note that Friday’s price action is also greater that on Monday and even then on some other days of the week. So as on stock market, when professionals are active till the end of the day, as Forex professionals active till the end of the week. At the same time, we’ve already talked that trading session on Friday gradually fades out from New York’s lunch time until 17:00-18:00 EST and the market could turn to anemic conditions after 12:00-13:00 EST on Friday.
Pipruit: So what should I do then? For me each session looks attractive – Tokyo, as you’ve said could provides us with range trading opportunities or breakouts, London and NY with nice movements and huge liquidity. How can I get advantages all of them?
Pipruit: But how I will accomplish that, if, in fact, I will not have any rest at all?
So, let’s make a small conclusion about the timing of trading:
Reasonable times for trading:
- Crossing of different trading sessions is particularly suitable for trading, especially London and New York trading time overlapping;
- The European trading session itself, because it holds about 30-35% of overall daily transaction;
- Additional attention should be paid Europe and US morning time, because of macro data and news releases.
- The middle of the week shows greater activity than the beginning of the week, because professionals start gradually to pick up trading steam.
Unreasonable – better to stay flat:
- Weekend and Holidays – have you nothing better to do? Rest is must.
- On Friday in general, or at least in the second part of NY day (after 12:00 EST). First, because activity starts to fade during this period. Second, because market can turn to choppy price action and reverse previous trends. This could happen due to couple of reasons – massive close of positions before the weekend, and/or profit taking.
- During important macro data releases or Central banks minutes/statements – the market really can go mad and turn to Doom and Gloom in this period so, that you even can hear screams “Let me out!” if you just open your window during this time. Seriously speaking this is the time of whipsaw action and you could be stopped out (fixing a loss) if even you are right and market after some chop will continue move in your favor.
Pipruit: Well, this is really goldmine of insight. I even couldn’t assume that this information will be so important. Thanks, Commander.
Forex Peace Army/Education has been very fantastic and educative. It is highly comendable. I appreciate.
Yusuf A.