Forex trading has become a popular way to make money from the comfort of your own home. However, not all trading hours are created equal. Some times can be more volatile and unpredictable than others, making them the worst times to trade forex. Here are some of the worst times to trade forex and why you should avoid them.
1. Late Friday Afternoon
Friday afternoons are often the worst times to trade forex because traders are closing their positions for the weekend. This can cause sudden price movements and increased volatility, which can be difficult to predict. Additionally, many traders will be looking to take profits before the weekend, which can lead to erratic trading patterns. As such, it is best to avoid trading during the late afternoon on Fridays.
2. Holidays
Forex markets are closed on certain holidays, including Christmas, New Year’s Day, and Easter. Trading during these times can be risky because there is often lower liquidity, which can lead to wider bid-ask spreads and increased volatility. Additionally, some traders may be away from their trading desks, which can cause sudden price movements. As such, it is best to avoid trading during holidays.
3. Asian Session
The Asian session is often the quietest trading session of the day, with lower liquidity and fewer participants. This can make it difficult to find trading opportunities, and the lack of volatility can make it harder to make profits. Additionally, unexpected news or events can have a greater impact during this session, as there are fewer traders to absorb the shock. As such, it is best to avoid trading during the Asian session.
4. Early Monday Morning
The market opens at 5 pm EST on Sunday, which can lead to a gap in pricing when the market opens on Monday morning. This gap can be caused by unexpected news or events that occur over the weekend, and can be difficult to predict. Additionally, many traders are still adjusting to the new week and may be hesitant to enter new positions. As such, it is best to avoid trading during the early morning on Mondays.
5. Major Economic Data Releases
Major economic data releases, such as Non-Farm Payrolls, GDP, and Consumer Price Index (CPI), can cause significant volatility in the forex markets. Traders often wait for these releases and enter positions based on the news. This can lead to sudden price movements and increased volatility, making it difficult to predict market direction. As such, it is best to avoid trading during major economic data releases.
In conclusion, forex trading can be a lucrative way to make money, but it is important to know when to trade and when to avoid trading. The worst times to trade forex include late Friday afternoons, holidays, the Asian session, early Monday morning, and major economic data releases. By avoiding these times, traders can reduce their risk and increase their chances of success.
