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What are the best and worst days to trade forex?

Nick Goold

The forex market is open 24 hours a day, five days a week, so there are opportunities to trade anytime. However, certain days generally have better trading opportunities than others. This article will outline which days have better chances of making profits and which are more difficult.

Days with good chances of earning forex profits

Tuesday to Thursday

Tuesday to Thursday are usually the best days to trade forex for many reasons. The first reason is that market volatility is high, and there are consistently profitable trading opportunities for all types of traders. Consistent volatility gives traders confidence to focus on the market and be ready to execute their trading strategy.

The second reason is that traders are most likely to be focused on trading and motivated from Tuesday to Thursday. Traders increasingly understand the importance of the mental side of trading and its impact on their performance. The great advantage of trading forex is the chance to make large profits quickly; Tuesday to Thursday usually presents many opportunities.

The final reason is that the risk of rapid moves in one direction reduces due to the many active traders from Tuesday to Thursday. However, on Monday and Friday, forex prices can move very quickly in one direction, making it more challenging to manage your risk.

Day after an important economic announcement

The day after a significant economic announcement can present many trading opportunities. If the news release was surprising, the forex price trend could continue the following day. Alternatively, if the market panicked and overreacted, there could be a great trading opportunity to trade against the trend.

Days which can be harder to earn forex profits

Large economic announcements

The forex market can be quiet on trading days before a big economic announcement like a US inflation figure or US monetary policy statement. This is because traders prefer to wait until the announcement before taking positions so forex prices can move sideways, making it challenging to extend profitable trades. However, there can be profitable opportunities for traders who are patient when the forex market moves significantly in one direction, as the market is likely to reverse ahead of the economic announcement.

Following the economic announcement, forex prices can move exceptionally quickly, and only experienced traders are usually successful at consistently earning profits. Therefore, it is usually best for most traders to wait at least 30 minutes after the economic announcement to trade.

Market holidays

US holidays have the most impact on the market and usually result in the Asian and European sessions being quieter than usual. Therefore, avoiding trading the European or US sessions on US holidays is usually best, as fewer profitable trading opportunities exist.

Japanese or Chinese holidays will usually make the European open quieter but have little impact on forex market volatility afterward so that you can trade the European and US sessions as usual.

Mondays

Monday is usually the quietest day of the week. Many traders want to take their time analyzing the market, and usually, there are few economic releases on a Monday. However, occasionally news over the weekend can make the Asian open active, producing profitable trading opportunities.

Traders should ensure they are prepared to trade on a Monday and not still thinking about the weekend. One poor trade can lead to further losses making it challenging to recover and end the week with a profit.

Fridays

Fridays usually have high volatility and can be the most volatile day of the week. The difficulty with trading on a Friday is traders can be tired after a long week of trading and make poor decisions. In addition, the forex market can move much more quickly than the rest of the week on a Friday, making it more difficult to execute your trading strategy.

Traders who have made losses that week will likely take large risks to try and end the week with a profit. Conversely, those traders who have made good profits can become too scared of losing and make poor trades. Both traders can get into a negative spiral of chasing losses. Therefore, it is vital to only trade on a Friday when you are calm and can focus on the market rather than worrying about your account balance.

On the first Friday of the month, the US employment figures typically result in a significant move for all forex markets. However, as detailed above, trading on a critical economic release day can be difficult. Therefore, traders should be well prepared for large market moves and understand the impact of the employment figures to make sound trading decisions.

Friday`s can be very profitable for those traders who can adapt their trading strategy to the market. In addition, those traders who understand the market patterns are slightly different on a Friday can earn large profits.

Traders who can adapt their trading strategy to different days of the week are rare. Analyze your past performance on different days of the week, and you will likely find particular days you are profitable. There is no reason to trade every day. It is much better to trade more when you are most successful and rest when you struggle to find profitable trades.