Why time is very important for traders? Well, there are two philosophies for trading, one is trading when there is high volatility and the other is trading when there is low volatility. High volatility happens during the peak hours of trading, it is when two or more markets are open at the same time, example, the US and UK market is open at the same time or UK and JP market is open, most trader will say that trading during these peak hours are most profitable, because during these hours the market will be very active and the movement is very high, and thus it is profitable. But for other traders it is not likely, it is prone to lose, so there are traders that prefer a low but steady movement.
Time Time to Trade
When trading on high volatility, you must prepare yourself with tools that will help you to trade. These tools are used to predict the movement of the flow, an example of this is the Fibonacci System. When trading also on low volatility, you must be certain of the trend so that you may place your bid on the gaining side.
Trading on high volatility, as I say, you should know when the two markets overlap each other, below are the time when two major markets overlap:
U.S./London (8 am to 12 pm EST) – this is the best time to trade if you love to trade with high volatility since these currencies are the most popular to trade, this pair also is the have the highest volatility of all.
Sydney/Tokyo (2 am to 4 am EST) – this pair is not as volatile as the US/London pair but still they offer a considerable amount of chance for a sudden pip fluctuation.
London/Tokyo (3 am to 4 am EST) – this one hour maybe the less of the three, but it also offers a chance for big changes on the pip fluctuation, the main reason of this is because the US traders are sleeping.
Best Day to Trade
Learning the proper time for trading on high volatility, you should also know what day of the week that is proper for trading. As for Monday, I think traders also do not like Mondays since base on research, there is very little movement in pips on Mondays. So after Monday, is Tuesday, and during this time, traders are likely to be active, they are many tendencies to shift dramatically. But for optimal trading, Wednesday, Thursday and Friday are the best days to trade for high volatility.
After learning the best day to trade, you should also know what day that is not good for trading. The days that are not good to trades are holidays where people are enjoying themselves and an example of this is Independence Day (US holiday); Thanksgiving Day; Labor Day. It is not also good to trade when there is major news coming, because, during this time when you bid on the wrong side, you could incur heavy losses.
After knowing all this you should have select your proper time to trade that will suit you. Whether you want to trade on high volatile or on low volatile. You should also take proper rest when trading since most traders like to keep trading at very late hours, especially if you are from a different time-zone that needs to keep up late. There are also traders that prefer to sleep in the morning then wakes up in the evening to match the proper time to trade, which is not advisable because it will destroy their health. So, it is important to keep a balance in everything, in this matter, since the best trading day is only 3 days. You should prepare your body for it and relax after the day is over.
I think that is all, I hope you find the best day to trade after reading this article and become a hotshot trader.