Has someone advised you not to trade forex on Friday? Do you agree with him?
It means you are avoiding trading forex on Fridays. Because you never want to trade at the wrong time.
But curiosity always disturbs you while planning a trading strategy. Is Friday worse for everyone or for someone?
Just go through this post to solve all the confusion regarding Why not trade on Friday?
It’s better to avoid trading on Fridays. Because many traders are ready to close their already opened weekly positions. Another reason is the high fluctuation of prices in the market. The second half part of Friday is full of risks.
Friday also provides chances to trade like other days. But sometimes the spreads show terrible results on the last working day. Which makes the people frightened to trade?
Scroll down to find the reason!
Why Friday Is Not Suitable for Forex Trading
Usually, FX is not open on a Friday. The graph of trade shows less volume at weekends.
The reasons behind this are:
- Institutions are in the mode of winding up their positions.
- They have already kept their positions throughout the week.
- Now the retailer’s money is no longer existing in the market.
- The market will not make large movements.
- Mostly Friday is considered as the last working day.
- On average FX traders don’t take Friday suitable for their trades.
3 Reasons to Avoid Forex Trading on Friday
Trading this day has a close relation with trading plans. If you are a long-term trader, you have no need to avoid Friday trading.
But if you are a short-term trader, it is better for you to set aside
Friday trading also depends on your trading strategies. But it is true that forex trading on Friday is very different from other days.
There are many reasons to skip forex trading on Friday.
3 Major Reasons Not to Trade Forex on Friday
Your starting of the day is the closing time of the Asian market. It tells that you are on the unsecured side of the market traders. Especially on Fridays, trading volume is low. That results in low liquidity. So, you have a few chances to win your trade and many risks to maintain it on the last day of the week.
|2. Quick Response on The Week-End Situations|
You are unable to respond on the weekend situations. In case of sudden political news breaks, you take a risky opening on the evening time of Friday. When the price goes against your trade, it will blow up your account.
|3. Charges of Rollover Rate|
In case of holding your trades that day, you have to pay a Rollover Rate. It doesn’t affect your long-term trades. In the end, it can decrease the profit of short-term traders.
Do Experience People Trade Forex on Fridays
Generally, Friday is considered the more unpredictable and risky day of the week for forex traders.
Traders who are unaware of the depth of this trading day should sit aside.
The main fact that stops you to jump into the market on Friday is:
The market is not open from 4:00 pm to 5:00 pm (Friday NYT to Sunday NYT).
Expert traders never feel insecure to trade closing day. If you are an experienced trader, Friday proves a profitable deal for your trade.
Fridays got crazy for professional traders. They just forget it’s Friday while entering their trades and making wild pips. It depends on your trading strategy.
Overall Fridays are the unpredictable trading days of the marketplace. So, holding positions on Fridays is not safe. That’s why it is the worst day for newbies.
Just try to find out the exact time of Friday to enter your trade. Before noon is surely a good time. Afternoon it drops quickly.
Why Is It Unsafe to Trade FOREX on Fridays
Experienced traders want to take benefits on regular basis. They do their business every day. Some days are less volatile.
Picking the good days is unpredictable. Uncertainty is part of the trading game.
You cannot find out the good trading days. However, facts tell that Fridays are the crawling days to trade forex.
Although sometimes Friday proves to be an ideal day to get more. But it is highly risky for common people.
Two main reasons that make the traders unsafe to place their trades on Fridays.
Sometimes situations change within a short time period. At that time the opening price (Monday) gets crazier than that of the closing price (Friday).
That is the time when you see a gap emerging in a chart of forex.
This gap makes you double-minded: it may be the right or wrong time to trade for you. So, opening your trade on Friday is not safe.
But if you close your trade before the end of the day will secure you from the risks of a gap.
2. Interest Rate
When you keep your short trades to the next day, they get eligible for high interests. Now you will have to pay more interest.
To avoid this, you should know the paying and receiving conditions of markup.
This is actionable only when you keep your trades open during the full day.
Mostly scalpers and day traders avoid qualifying interest on their trades. Traders who open swap-free accounts never pay high interest.
Is It Good to Trade Forex on Fridays?
Usually, the trading atmosphere is good before noon on Friday. So, you can only get benefits on your trades placed before noon. However, the second half of Friday seems slow.
Is It Bad to Trade Forex on Mondays?
Generally, Monday mornings are less volatile, so your trading signals don’t work exactly during these moments of the week. Overall Monday mornings prove bad trading times of the week.
Do Days Matter in Forex Trading?
FX is a 24 hours market, you can earn anytime. But days matter in case of good results and volume. If you are expecting more, find out the good trading days of the week. Because all days have different market situations.
At the end of this post, it is clear that traders should be aware of the reasons to avoid the FX market. Friday is considered like a Stop Loss Hunting Day of the week.
The prices go back and the market becomes less volatile. This situation keeps the traders calm on Friday.
Most traders keep away their entries on Friday because most traders are winding up their already opened weekly positions.
Beginners feel it hard to trade on Friday because they are unable to judge the market conditions. As a result, they get emotional to enter the market on Friday.
On the other hand, traders like to exit on Friday as they have a lack of knowledge about their entrance and exit. Experienced traders are still getting more on Friday.
As the first part of Friday may be earning time for long-term traders. But it is better for short-time traders to keep away from trading on Friday.