Day trading is the practice of buying and selling financial assets such as foreign currencies, commodities, stocks, indices and bonds with the aim of making a profit.
As opposed to investing, Trading has a very short time frame horizon. It is not uncommon to see a trader opening a trade and then closing it within a few minutes.
So it is only natural that many traders would like to know.”What are the best hours of the day for trading(or days or months). Having a clear goal is to maximize the individual’s efforts and gains.
In this article, we will explore together the best time of day to trade.
Why trade at specific times?
The financial market has become very dynamic In the past few years. for one, Markets are open for more hours These days.
duly You trade, it is possible to trade 24 hours every day. For example, file The forex market is open 24 hours a day, five days a week While Cryptocurrency It is traded on a 7-7 Basis. Stocks, on the other hand, are open Monday through Friday for a few hours each day.
And therefore, It has a fixed time Trade can help you a Fantastic deal For several reasons. Or not, It will become routinemaking it easier for you to trade. Secondly, setting a specific time will help you Pattern development for the specific assets you trade.
Third, and most importantly, Usually all market hours are not the same. For example, in stocks, the most active hours are while the market is open. For forex, the best trading times are usually at the intersection of the Asian and European sessions and the intersection of the European and American sessions.
US stock trading divisions
usually there Four major periods from the US stock market. The normal session It usually opens at 09:30 AM and closes at 16:30 ET. This is usually the most active period when most traders are involved in the market.
It is possible to trade before the market opens, in what is known as the pre-market session. This session starts from 4:00 to 9:30 ET. This is a very important session since then Usually sets the tone for the day. In most cases, pre-market movers are usually the most active in a normal session.
It is also It is possible to trade after the market closes, known as the extended session. Like the pre-market session, the very extended hours Important, especially during earnings season.
Different time, different orders
The Just difference Between pre-market, extended hours and regular cycle It is the type of open order.
In the Normal A trader can perform both Pending orders and market. On the other hand, in Before being put on the market And the they expanded Hours, the merchant can Just Open pending orders which are executed when the market opens.
Best time to trade stocks
to be clear, There are trading opportunities at all times in the financial market. butAfter analyzing the market movement during all sessions, Most analysts think so Trading in the beginning for the regular session It offers some of the best opportunities.
this happens Because This is the time when Pending orders executed in pre-market and extended hours full b. Therefore, between 09:30 and 10:30 is an excellent time to trade due to the high volume and a lot of volatility.
on the other side, Trading towards market close can be a bit risky Because this is the time when most traders close their positions. As such, it is possible to get some false signals.
However, some traders have mastered how to trade well and make money during the day when volume and volatility are scarce. They do this by analyzing trends and Determine how to trade stocks after initial volatility What happens while the market is open.
Once again showing some volatility is through the overlap between the American and European sessions. This usually happens around 5:40 PM GMT. in this period , some merchants usually Moving from European stock trading to US stock.
Related “ Why is trading from the EU paying off
Best times to trade forex
The forex market is usually open 24 hours a day from Monday to Friday. The Three basic sessions for the forex market be The Asian, European and American. In most cases, a file Asia usually session Show less volatility Because of the limited major events that occurred during this period.
The Then volatility begins to rise during the European session Followed by the American. still The period with the most volume and volatility is the cross From the Asian and European courses and between European and American courses. The chart below shows these timelines.
The European and US sessions are important because of the data that is usually shown. For example, some of the most important data such as non-farm payrolls (NFP), inflation and retail sales usually come in the US session,
Using the futures market to trade
One of the important things in market timing is futures market. The most important futures markets are On the main indicators Like the Dow Jones, S&P 500, and Nasdaq 100. In most cases, the performance of these future assets can determine how other assets trade.
Related “ How do you profit from futures contracts for initial trading?
For example, if the Dow Jones index futures drop by 1%, this means that European indices such as the DAX and FTSE 100 will also open sharply lower. If these indicators are decliningAnd the Opportunities High The US dollar index is on the rise Because it is often seen as a safe haven.
Best times to trade commodities
Another common question is about Best times to trade commodities Such as gold, silver and copper.
As with forex, these commodities be usually Provided for longer periods. Also, these assets tend to have Close relationship with the wider market. Therefore, the best times commodity trading he is usually in European session.
Summary
Timing is an important thing in trading. In this article, we have looked at the concept of when the different market opens and closes. We have too I considered the best times to trade The most volatile and voluminous.
However, as we have indicated, it is possible to formulate a strategy that focuses on periods free from volatility.
Useful external resources
- What is the best time to trade? – kora