Best Days to Trade Forex (2024)

The best way to determine the best trading days for forex is by using a pip range to check volatility. One can easily keep track of volatility when using some top trading platforms such as Audacity Capital. These platforms contain information that may help determine the best day to trade forex.

Pip is the unit measurement used to determine the difference in value between two currencies. It comprises the last decimal place of a price quote. Almost all pairs go up to four decimal places. However, a few options, such as Japanese Yen pairs, may go up to two decimal places.

The pip difference can be used as a volatility indicator, but it does not measure volatility. However, traders could use it to obtain a clear picture of the forex market. It shows the extent to which markets can move within a day, but traders cannot determine the swings within the pip range.

All first-time forex traders always hit the market running. They closely monitor the economic calendar and ensure that they trade on every data release. Despite being a convenient trading method, this strategy could deplete one’s reserve and lead to burnout in traders that are more experienced.

Unlike other ventures that run during normal business hours, the forex market runs during the normal hours of four different world regions due to variations in time zones. Therefore, forex trading could last throughout the day.

People with trading experience understand that market volatility lacks consistency. Variations can occur within hours, days, weeks, or months. Therefore, it is essential to learn how to employ volatility protection techniques. It will help understand the variation between major profits and losses.

Tuesday is the most active day of the week. Trading patterns quicken, and the market experiences the first spike of the week. Market volatility on Tuesdays could reach 120%-130% of Monday’s volatility. Therefore, Tuesdays are one of the best days for forex trading.

Wednesdays experience a small dip in volatility due to a decrease in trading activity. The drop is comparable to what happens between Mondays and Tuesdays and results from a phenomenon known as a swap.

Swaps represent the interest paid by traders who maintain their positions during daily sessions. A triple swap occurs when traders hold their position on Wednesday. However, it could only be true when the position was open over the weekend. Swaps are never a burden when the session experiences small trading volumes.

Intraday traders are never bothered with swaps since they do not trade overnight. Traders who operate long-term trades benefit from positive triple swaps characterized by high profits. Therefore, Wednesday’s volatility is always lower than Tuesday’s and Thursday’s.

High volatility experienced on Thursdays also makes it the best forex trading day.

Fridays are special forex trading days since something special happens on this day. Popular currency pairs from Asian and European sessions begin to overlap. They remain volatile as Thursday’s session. The main currency pairs traded on Friday include:

• EUR/JPY
• GBP/JPY

On the other hand, currency pairs from North America and the Asia Pacific have dropped since the economies start closing on Friday night. However, early Friday hours experience many activities providing a good trading period.

Weekly trends affect the trading direction since traders begin to close their positions to avoid the weekend risk. A non-farm payroll report gets published every first Friday of the month in the U.S. The data available in the report could affect all trades involving the U.S dollar pairs.

Therefore, due to high volatility, Tuesdays, Wednesdays, and Thursdays are the best forex trading days. Midweek experiences high trading activities, while Monday is the slowest trade forex day. Fridays are the most unpredictable and thus require forex trading timings.

The intraweek market dynamics can help you determine the best days to trade in forex. However, volatility conditions may vary throughout the year. The forex calendar is divided into three periods of volatility. Out of these three periods, only two offer the best trading conditions.

Experts insist that the first good period includes the months of

• January
• February
• March
• April
• May

In June, July and August, volatility slows down due to the summer season, making it the worst time to trade forex. The reduced trading activity during summer results from the changing habits of large market movers. Different surveys show that summer months have the least returns, especially in the London session.

Most institutions traders in America and Europe go on vacations in august, making it the worst month to trade. Traders will notice bigger and unpredictable price swings, and big market movers try to protect their portfolio, leading to:

• Long-term traders halting their operations during summer
• Resumption of trading activities during autumn

People who still trade during summer should prepare a range-based system, which is appropriate. It is essential to practice small interval trades.

The market begins to catch up again during autumn, from September to November. This period also experiences high volatility. Most businesses begin to resume their activities.

December is also a good trading month, especially in the first half of the month. However, traders notice a decrease in trading activity in the second half. The holidays also create fluctuations in the market. The market gets back after the holiday period ends.

The first few weeks in January are also slow until mid-January. The first period of the year is always open to trading.