The best trading time in the market

Unlike long-term investments, trading is often done with short-term goals in mind. A trader buys a stock or currency not for a long-term hold, but rather for a relatively quick trade over a given period of time (be it a few days, a week, a month or even three months). Of course, day trading, as the name suggests, is among the shortest time frames. Therefore, the analysis of day traders may be focused on hours, minutes and even seconds. With these interpretations, do you believe there is such a thing as the best time to trade digital currency?

Best time to trade during the day

People who know what cryptocurrency is, believe that usually early in the morning, the market volume and prices increase dramatically. but why? Because in the early opening hours, the markets are involved in the events and news of the past hours. This time is considered the best trading hour for professional traders. Because in this situation, by recognizing the right patterns, they can earn a lot of profit. But what about a novice cryptocurrency trader? Definitely not, he may suffer heavy losses.

“If you are a beginner, avoid trading in the early hours of market opening (first hour)”.

9:30am to 10:30am ET is the best time to trade the financial markets because, as mentioned, the biggest swings usually happen around this time. Even many professional traders stop trading around 11:30 AM due to low volatility.

In the middle of the day, we see the calmest and most stable trading time. At this time, people are waiting for additional news to see which direction the market will go in the rest of the day. Mid-day is a good time for beginner traders, as prices are relatively stable during this time frame. During these hours, market fluctuations are weaker and profits are more predictable.

Later in the day, volatility and trading volume increase again. In fact, common market patterns in the last hour can be the same as in the first hour. At this time we again see extreme volatility, especially in the last few minutes of trading. So from 3:00 PM to 4:00 PM (ET), traders close most of their positions.

Best time to trade during the week

Some people believe that some days of the week systematically have better returns than others. Although there is little evidence to prove this phenomenon in the market, it is called “Monday effect”. Therefore, people believe that the first day of the week is the best time for shopping. This happens for several reasons:

A significant amount of bad news is generally released over the weekend.
Some attribute this to investors’ first day depression, which manifests itself in the early hours of Monday’s trading.

But whatever the reason, today the effect of Dushanbe has faded to a great extent and its effect on the financial markets is very small. However, if you are going to buy Bitcoin or any other currency, it might be better to stick to the Monday effect and do it on Monday!

If we consider Monday as the best day of the week to buy stocks or cryptocurrency, Friday is also the best day to sell. That’s because in the United States, Friday is the eve of the holiday weekend, and financial markets tend to rise due to positive pre-holiday sentiment. Therefore, Friday is a good day for a short (sell) position.

The best month to buy a currency

Markets typically have strong returns late in the year as well as during the summer months. The chart above shows the average monthly returns of the S&P 500 between 1950 and 2017.

In trading markets, there is a term called “January effect”. This is because at the beginning of the new year, investors return to the market and this causes prices to rise (especially stocks with low market capitalization). Therefore, seasonally, the end of December is a good time to buy stocks with low market capitalization. Another reason is that many investors start selling stocks in droves (especially stocks that have declined in value) at the end of the year for their tax returns. Therefore, selling pressure has made December a good time to buy.

The best month to sell a currency

It has always been believed that September is a fall month. But October also recorded a record drop of 19.7 and 21.5 percent during the years 1907 (Knicker-Becker Crisis), 1929 (Great Depression) and 1987 (Black Monday). As a result, some traders believe that both September and October are the best months to sell stocks.

The September effect underscores historic declines during the ninth month of the year, which could help institutional investors close third-quarter positions.

The October Effect stands out to some investors in that October is historically a bullish month, but many of the market’s historic falls have occurred in the month.

The best trading time among the days of the month

There is no day of the month that is always ideal for buying or selling. However, there is an inherent interest in increasing the price at the end of each month. This feeling generally stems from the new cash flows that flow into mutual funds at the beginning of each month.

In addition, fund managers try to make their balance sheet positive at the end of every quarter by buying stocks that have performed well. Therefore, the best day of each month to sell stocks is probably the last five days of the month and the beginning of the following month.

Introducing the Market 24h Clock tool

One of the main problems of traders is knowing the world clock of different financial markets. For example, if we talk about 9:00 a.m. New York time, what time is it in Iran? Or which financial markets are operating at the moment we are talking to you? Or the market you want, which may have a great impact on prices, when will it be activated in Iran time? These are the problems that a trader in different parts of the world is dealing with. For this, the Forex website has introduced a useful tool called Market 24h Clock, which we recommend to every trader.

In Market 24h Clock there is a world clock by which you can easily get the following information:

Based on the country you live in (eg Iran), what time is it in America?
Which financial markets are open or closed in different parts of the world at any given moment.
Graphically, the remaining time for the markets to open or close can be seen.

منبع:

https://wallex.ir