One can not talk about Forex trading hours without explaining
the implications of Forex trading days. Quite often, one will come across Forex traders who adhere to the Forex trading hours rules, but fail to understand how Forex trading days influence trading profit.
A full understanding of each Forex trading day is essential.
Forex trading days influence more swing trading than FX day trading. A Forex day trader may get away with violating FX trading days rules by sticking to currencies trading hours guidelines.
Nevertheless, those day traders will avoid other FX trading mistakes if they adhere to both rules.
All in all, a currency trader who intents to hold FX trading positions for more than one day must grasps Foreign Exchange trading days rules. The first rules that day traders ought to remember are the Forex trading hours principles.
Generally, one can trade the foreign exchange market from Sunday at 22:00 London time to Friday at 22:00. Apart from the Forex trading hours rules that one can not avoid, there are also FX trading days that are very challenging to both
advanced and beginner FX traders.
The trick is to trade less or not at all those days, and be ready to maximize profit when the currencies market is smiling broadly.
Forex Trading Days To Avoid
1/ Avoid trading Forex on Sunday. Do not ask me why. Try it and see if it is worthy it. If it works for you then good. Sometimes, professional Forex traders do violate that rule because of expected economic news that are released late in the night on Sunday.
2/ Most Forex swing traders like myself are very careful on Mondays, and prefer to enter swing trades on Tuesday. The idea is to see how Monday plays out before taking a swing trade.
Are you like one of those swing traders?
3/ Avoid taking too many Forex trading positions during the first eight days of each month due to the high volatility that derived from multiple high impact economic news. Those Forex trading days are quite challenging to all foreign exchange technical
traders especially the beginner FX traders.
4/ From the 15th to 18th each month, you may decide to take some days off as an active Forex trader because of the risks that come from the mid month economic news.
Those Forex trading days deserve the attention of all online currencies traders.
A highly defensive trading strategy should be put in place if one decides to trade on those days.
Take it from me, you do not have to be a courageous Forex trader. Sometimes, it is better to trade another day. Just say like Arnold Schwarzenegger: "I will be back".
5/ The curse of Friday Forex trading day can be avoided. I do not know why but the Forex market becomes inefficient on the Fridays 13th. This is just a self fulfilling belief that traders accept.
Apart from the Fridays 13th, one can go away and play golf or do something else when the Non Farm economic news
is released. That Daddy high impact news is often released on the first Friday each month. Note that sometimes the date may change do public holidays.
Check the economic news calendar every day.
6/ Some Forex traders only trade the London trading session on Wednesday due to the Crude Oil Inventories news that is due at 10:30 AM American Eastern time, that is 15.30 PM London time. Other traders who are a bit courageous will also trade thirty minutes later after the news for only one hour.
Note that those positions are often speculative, but not all Wednesdays are the same. Just be aware of what the Forex trading day Wednesday entails, and take trades like an intelligent trader. Note that Really, before the major economic news are due, the Forex market becomes a little bit inefficient.
5/ Do me a favor, and take some days off to do other things in life from the 15th December to 8th of January. Resist the temptation to trade during those days because of the new year festival and Christmas. Those Forex trading days are usually illiquid and boring.
One can avoid throwing money away just because professional FX traders are away on holidays.
6/ Personally, I always recommend to those who want to trade the Forex markets like a pro to stay away from the 1st January to 13th February before starting the new year.
In January, there are a lot of financial markets adjustment, and behind the scene portfolio pruning that often render the market inefficient to market participants, especially the
technical currencies traders.
Are you also aware of those anomalies during the first forty-four
days of the year? I always do everything to remind myself of those Forex trading days.
7/ Be aware of the Forex trading days that coincide with European, American and other major national or bank holidays. For example Martin Luther King Day, 14 July in France or 4th July in USA and so on. Do not forget global leaders gatherings like G5, G7 leaders and others.
Finally, do not trade Forex without knowing the major economic, geopolitical and natural news that may affect human beings (market participants' sentiment).
Best Forex Trading Days
Well, any Forex trading day that is efficient and does not entail too much risks is a good day for an active Forex trader. Apart from the Forex trading days that one must avoid, one
can trade other days in a normal condition if the market is liquid and high probability trades have been identified.
Be ready to trade the last Forex trading day of each month (30th or 31st) except in January and December.
In fact, the Forex market can be friendlier during the last ten days of the month.
One can trade Forex from 9th to 14th and from 19th to 30th without too much risks. Note that though the risks always exist , one is trying to minimize them. That is all.
The most important thing is the risk management and five per cent money management rules.
Take for example a day full of many economic news. On a such day, if one wants to trade the foreign exchange market, one ought to trade it defensively without leaving any stones unturned.
See below an example of a typical busy economic news day on the 25 July 2019.
There are four high impact economic news on that day. It is essential that one takes the necessary
trading measures. Alright.
Thu Jul 25 2019 Economic News Calendar
Spanish Unemployment Rate
German Ifo Business Climate
CBI Realized Sales
Main Refinancing Rate
Monetary Policy Statement
ECB Press Conference
Core Durable Goods Orders m/m
Durable Goods Orders m/m
Goods Trade Balance
Prelim Wholesale Inventories m/m
The above economic news calendar example is from https://www.forexfactory.com/calendar.php
Apart from everything that I have said before, be an active Forex trader from 14th February until 14th May.
Then take a pause or slow down in May. Come back again from June to mid December.
The months of earnings news in the financial markets in general are April, July, October and January.
If you are trading Forex those months be aware of the financial markets' earning news that are due at the end of each quarter.
Alright, you get the message. There are good and tricky days if one is trading Forex.
Understanding what each Forex trading day entails is the key to getting something out of this messy FX market. Whether one is using the most robust trading systems or playing
around, one must scan and diagnose each Forex trading day before risking a dime or penny.
Do not let yourself down anymore by ignoring the Forex trading days rules. Use those rules as a guide to get to the most profitable trades.
OK, have forgotten anything? Is there anything else I need to add to this essential FX trading article?
No worries, it won't be too long before I come back to add more pages to this one if there is anything else I need to add.
I hope this article is useful to your Forex trading. If that is the case, feel free to share it on the social media.
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This article is written by George Beaulieu.