Forex trading is a beautiful blend of skill, strategy, and timing. Yes, timing matters a lot. You can trade all year long but certain positions, days, and months may bring extra luck for you. While some other months would not give you much profit despite your best trading skills.
Here the query is when to trade and when not to trade. What are the worst months for forex trading? Should you seize the moment and wait for the best time? What to do?
Which month is not good for trading forex?
Summer months are terrible, and involve high risk for trading. However, December is considered as bad as August for trading. Because the forex market remains slow for a couple of weeks before and after the Christmas holidays.
You can face a few unexpected swings due to a massive decrease in trading volume.
International holidays impose a huge impact on foreign exchange as the forex market and banks are also closed. And, most of the traders seize their trade and go on breaks or vacations. Therefore, trading activities slow down greatly after the second half of December. The situation continues till the first week of January.
Which Month Is Not Good for Trading Forex
Do you think a few months are bad for trading? Yes! Which month is not good to make profits? December, why?
December is neither too good nor too bad, it’s a moderate month for trading. If you research the previous year’s data, you will find that the end of December is not good for making huge profits.
Because trading volumes are relatively low in the last two weeks of the year till early January. Moreover, your standard indicators are unlikely to work.
Remember, any month with high volatility can be unpredictable and cause you a great loss.
Timing Is Crucial: Good, Better & Worst Times For Trading
We know that timing is everything in forex trading but what are the best months to trade is highly debatable, different traders have different opinions.
According to many forex traders, the whole year is divided into three trading phases:
the boom period from January to May provides the five best months of great opportunities ahead. The summer is a snoozing phase, from June to August, the worst time for trading. Finally, September, October, and November are the better months.
As the market retrieves its lost strength after a long summer drought in the forex market.
Which Month Is Good for Trading Forex
Are some months better for trading than others?
We know that stock market volatility keeps on changing not only every hour but also every week, every month, or even with the season.
There are five good months for forex trading. For instance, January, February, March, April, and May. Whereas autumn months (September to December) offer the best days of the year for trading forex.
The Best Month for Trading Forex
What are the best forex trading days?
The best months for forex start from September to 20th December. In these four months, a huge and sudden trading activity begins after the summer holidays. However, a temporary break comes for almost 3 weeks from the mid of December till the first week of January.
These months are considered the best trading days for traders as the forex market recovers its position after the worst period of summer.
The Worst Month for Trading Forex
What is the worst time to trade forex? Are there slump months for traders?
The summer months are the slump months for traders. You should trade cautiously or stay away during these months. The worst months for trading are June, July, and especially August. Trading is extremely slow in these months.
Summer vacations cause a depletion in trading volume or a big reversal not only in Europe but in America too.
Be careful while trading in August, first identify the trend of the market then make appropriate strategies accordingly.
FAQs
When should you not trade forex?
Monday morning and Friday afternoon are not good for trading. You should also stay away from trading after a global holiday, political event, and during news of high impact. Moreover, don’t over-trade especially when you are losing constantly. You should not trade when the market is too high or too low or unless you fully comprehend the risk of loss.
Is November a good month for trading?
Undoubtedly, November is the best month for forex because trading volume is remarkably high this month. November is also a bullish month for most currency pairs. Statistics show that October and November are the best months of the year for active trading for the previous few decades.
Is December a bad month for trading?
No, December is not all bad. But some traders think December is a bad month and is very challenging for trading. Collectively, it is an average month with high trading volume till the 20th of December. But as Christmas approaches, all the trading activities are too low up to the first week of January.
Is August a bad month for forex trading?
No doubt, all summer months are bad and very difficult for trading. But August is always taken as the worst month of the year because of the least trading opportunity in Europe and America. The forex market seems to cool down for the whole summer, mainly due to summer vacations. According to S&P data, August particularly shows the least returns for most of the financial markets.
What is the best time to trade forex?
The best time for forex trading starts from Tuesday and lasts till Friday morning. The best trading hours are those when there is the heaviest trading volume and excellent trading opportunities. In this regard, 8 a.m. to noon EST, US/London market overlap is the best time to trade.
Closing Thoughts
In short, the whole year is divided into three trading phases. The boom period from January to May is the best trading time. Snoozing phase, June to August are the 3 worst months for trading.
In the final rebound Phase, September to November are the better months. Because the market retrieves its lost strength after a long summer drought in the forex market.
December is highly unpredictable and is regarded as a bad month for forex trading. While August is the worst month of the year for trading opportunities.
In forex, timing is vital but it’s pretty significant to identify the trend of the market and then make appropriate strategies accordingly. The counter-trend is a good strategy during vacation months. Primarily trend strategies go best during active trading months. Happy trading!
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