Best Days of the Week to Trade Forex

Forex trading allows investors to capitalize on short-term price fluctuations among fiat currencies. While long-term investors can buy and hold assets, other people prefer quick entry and exit points. Some days and economic cycles offer better opportunities than others. Forex traders should know the best days of the week to trade forex before getting involved with these assets.

Understanding Forex Market Sessions

Forex markets stay open 24 hours for five days per week. The market opens on Sunday at 5 p.m. Eastern and closes on Friday at 5 p.m. Eastern. Forex markets can stay open throughout the day because they consist of four major trading sessions:

• Sydney: 5 p.m. EST - 2 a.m. EST
• Tokyo: 7 p.m. EST - 4 a.m. EST
• London: 3 a.m. EST - noon EST
• New York: 8 a.m. EST - 5 p.m. EST

Those times correspond with each city’s highest volatility levels. Tokyo traders are up and active from 7 p.m. EST to 4 a.m. EST, but most New York traders are away from the markets at that time. That’s why the New York market is open at a more optimal time for New Yorkers and U.S. traders as a whole. These market hours increase liquidity in the forex market.

Higher liquidity among these major markets allows traders to move more quickly between fiat currencies while having low bid-ask spreads. The ability to move quickly can help traders capitalize on breaking news that will affect currency exchange rates. Other financial markets with less liquidity are more expensive for traders.

Best Days to Trade Forex

Traders need high volatility to profit from sharp price swings in either direction. If currency exchange rates stay flat, traders don’t have as many opportunities to generate profits. While each day can present major news that pulls markets in either direction, the middle of the week is better.

Tuesday, Wednesday and Thursday are the best days to trade forex due to their heightened volatility. More things can happen during those three days, and traders have more time to respond. Day traders can opt to exit the forex market on Friday to avoid holding positions over the weekend. Swing traders can also consider opening positions on Monday so they are ready for the heightened volatility that comes in the middle of the week. 

Scalpers can also benefit from trading in the middle of the week. Scalping is a type of forex trading strategy that involves buying an asset and quickly selling it to realize a small profit. Scalpers initiate dozens or even hundreds of these trades in a given day, realizing incremental profits that can add up.

Breakdown of Trading Days

While the forex market doesn’t offer any certainties, each day of the week typically follows a pattern. 

Monday: A Slow Start

The forex markets typically start off slow on Monday due to fewer participants and less market news. Traders won’t have as many opportunities to make a profit on Monday, but day traders and swing traders will still look for opportunities. Day traders and scalpers will still look for ways to profit today, while swing traders may accumulate currencies on Monday in anticipation of sharper price movements in the middle of the week.

Tuesday: Increasing Activity

More market participants put their money into forex markets on Tuesday, and trading starts to pick up. Volatility usually more than doubles on a Tuesday trading session compared to a Monday trading session. Economic news tends to come out in the middle of the week, and that translates into more dramatic price swings in the forex market.

Wednesday: Midweek Momentum

The high volatility carries over into Wednesday. The market may be digesting economic reports released on Tuesday while anticipating other economic reports coming out on Wednesday. Each country releases numerous economic reports in a given year. Traders who follow multiple currency pairs have more economic reports to monitor. 

Thursday: Peak Trading Conditions

Forex markets reach their crescendo on Thursday, as traders are reacting to a wide range of reports, news items and other data points. There isn’t much time left before the markets close over the weekend, so Thursday often attracts more market participants. Traders may discover strong trends and breakout opportunities during this day of the week.

Friday: Early Action, Then Slowdown

The first half of the day has some volatility, but there is a drop off in the second half as people step away from the forex market for the weekend. Day traders and swing traders may close their positions so they have less capital exposed in forex markets over the weekend. Some traders may find opportunities to generate short-term profits, but most don’t want to risk big news happening over the weekend that can significantly impact their positions.

Frequently Asked Questions