Forex
In the world of forex trading, timing is crucial. It can significantly impact a trader’s success, and understanding when to trade is key to maximizing opportunities.
Although the forex market operates 24/5, not all days are equally favorable for trading. Each day brings its unique characteristics, influenced by liquidity, volatility, and economic data releases. Understanding these daily trends can make a huge difference, especially for newcomers to the market.
While the London session tends to be the busiest, certain days during the week also experience more market movement than others.
What Are the Best Days to Trade Forex?
The table below shows the average pip range for the major currency pairs across different days of the week:
Pair
Monday
Tuesday
Wednesday
EUR/USD
49
63
64
GBP/USD
65
80
85
USD/JPY
95
110
118
AUD/USD
45
60
62
NZD/USD
41
52
59
USD/CAD
55
71
68
USD/CHF
45
56
58
EUR/JPY
114
113
114
GBP/JPY
137
132
146
EUR/GBP
29
33
34
EUR/CHF
42
44
45
Pair
Thursday
Friday
EUR/USD
72
65
GBP/USD
90
86
USD/JPY
130
120
AUD/USD
61
67
NZD/USD
54
57
USD/CAD
69
73
USD/CHF
70
60
EUR/JPY
140
126
GBP/JPY
165
152
EUR/GBP
34
33
EUR/CHF
53
50
To make the data more digestible, here's a cleaner visual of currency volatility throughout the week:
Currency Volatility by Day of the Week
The chart reveals that mid-week, typically from Tuesday to Thursday, is when the most significant price movements happen across most currency pairs.
Fridays can also be active, but the volatility tends to drop significantly after 12:00 pm EST, leaving only half of the trading day active.
Optimal and Non-Optimal Trading Times
Best Times to Trade:
When two major trading sessions overlap, such as the London and New York sessions.
During market-moving news events that can increase volatility.
The middle of the week (Tuesday to Thursday) typically shows the highest activity.
The European session is often the busiest session for forex trading.
Worst Times to Trade:
Sundays: The market tends to be quiet as most traders are either still resting or easing into the new week.
Fridays: Liquidity drops in the latter part of the U.S. session as the market prepares for the weekend.
Holidays: Many traders are absent, which means lower market activity.
Major news events: Be cautious, as they can create sharp and unpredictable market movements.
Personal distractions: Avoid trading when you're not fully focused, such as after a personal setback.
How to Track Volatility
To track volatility for specific currency pairs, you can use tools like MarketMilk™. Follow these steps:
Visit MarketMilk™: Search for the symbol of the pair you wish to analyze.
Select "Volatility": Choose the "Volatility" option from the menu.
View “Volatility Per Day”: This section provides insights into daily volatility, measured in both percentage and pips.
Managing Your Trading Schedule
It’s essential to manage your time wisely as a forex trader. The market may be open 24/5, but that doesn’t mean it’s always active. Sleep and personal time are important for maintaining balance and avoiding burnout.
Every trader needs to know when to trade and, equally, when to step away. Sometimes, the best move is to take a break and come back refreshed rather than pushing through every session.
In Conclusion
The best days for forex trading are typically mid-week, especially when sessions overlap and market conditions are most favorable. Understanding the days and times when the market is most active can improve your chances of making profitable trades.
Are you ready to dive deeper into how you can start trading successfully? It’s time to put your knowledge into action!