When should we trade?

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…

Commander in Pips: Wise decision, son. So, in terms of week days, some are more suitable for trading that others. The Forex market does not different much from stock market, for example. Popular wisdom tells us that at the beginning of the week, the most part of pubic traders enter the market due to analysis that they have made during the week end. Professionals rather trade during the whole week, and closely look at initial splashes of activity that arose from public analysis and decisions. Then the market starts to show its real power. Even more, in stock market, this happens during the day also, because stock market has an open and close of its daily trading session. The public enters the market in the morning, based on analysis that it has done previously, and then turns to daily jobs, while professionals control real daily trends. That’s why open intraday gaps on stock market will close later in the day.

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?

Commander in Pips: Of cause not – trade your own trading plan that is based on your analysis. But keep an eye on price action during the whole week, even if you have a job somewhere else and trade on a weekly basis. You should understand that professionals very often trade against the public and you should recognize such types of traps, just to not to get caught in one. So for that purpose we’re here. 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?

Commander in Pips: When you will graduate from our school, you will understand that trading is based on a strict and detailed trading plan that demands fulfillment of some conditions in the market. So trading is an anticipation of execution of these conditions. Until that time you should sit on your hands and wait for when these conditions will be achieved by the market. What do all these complex talks mean? They mean that you should be ready to push the trigger when it really needs to be pushed. But you must have sufficient attention, patience and a clear mind to trade well.

Pipruit: But how I will accomplish that, if, in fact, I will not have any rest at all?

Commander in Pips: Professionals like to be a counterparty of individual traders, who do not rest enough. Because they make more mistakes and this makes it an easy task to take their money. Would you like to join them giving your money away? I think not. So, the rest/trading schedule should be the part of your trading plan. Understand that life is short, manifold, amazing and wonderful. Do not limit it just by trading. Devote time to your close ones, and spend your time wisely. There are a lot of fascinating things in this World beyond the trading… And the markets will still be there tomorrow. Do not ruin and limit your lifetime by spending every moment just following the markets.

In other words, just remember – Rest is a must if you want to see you’ll see how fresh and sharp your analysis will be. Otherwise your blurred view of the market will not be able recognize even obvious money laying on its surface.

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.