{"id":601,"date":"2021-07-30T12:38:08","date_gmt":"2021-07-30T12:38:08","guid":{"rendered":"http:\/\/forexrobo.trading\/blog\/?p=601"},"modified":"2021-07-30T12:40:39","modified_gmt":"2021-07-30T12:40:39","slug":"worst-time-to-trade-in-forex-for-a-newbie","status":"publish","type":"post","link":"https:\/\/forexrobo.trading\/blog\/education\/worst-time-to-trade-in-forex-for-a-newbie\/","title":{"rendered":"Worst time to trade in forex for a Newbie"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

The location of the signal was spot on, but the timing was off.<\/p>\n\n\n\n

Before I scare you off with yet another factor you need to consider, let me tell you that it isn\u2019t all that difficult. In this post I\u2019m going to share three times when sitting on the sideline may be the wise choice, as well as which are my favorite days to trade.<\/p>\n\n\n\n

I\u2019ll also share a few questions to ask yourself to make sure your mental game is on point.<\/p>\n\n\n\n

Immediately Before or After High-Impact News<\/h4>\n\n\n\n

As traders, volatility is what makes us money. You can\u2019t profit from a market that never moves.<\/p>\n\n\n\n

We\u2019ve all been in one of those positions that takes off almost immediately in our favor and doesn\u2019t want to stop. And after two days of traveling 300 pips, we\u2019re left with a boatload of cash.<\/p>\n\n\n\n

Those are good weeks. But they can also be incredibly dangerous, especially for the novice trader.<\/p>\n\n\n\n

You witness how an increase in volatility can produce profits out of thin air.<\/p>\n\n\n\n

On the surface it all seems quite innocent. After all, what\u2019s wrong with observing that higher volatility equals greater profits?<\/p>\n\n\n\n

Ah, now you see where I\u2019m going with this. You know that news, particularly high-impact events like rate decisions and non-farm payroll, trigger volatile conditions.<\/p>\n\n\n\n

If you have attempted trading events like these, you know how dangerous it can be. Yes, volatility can make us money, but attempting to trade an event that has a random outcome and market response isn\u2019t the way to go about it.<\/p>\n\n\n\n

It also goes against what we do as price action traders. Our trading edge comes from signals the market generates on the higher time frames, namely the daily charts.<\/p>\n\n\n\n

There\u2019s no edge in trading the news. That goes for entering a position immediately before or after an event.<\/p>\n\n\n\n

Even if the market behaves and moves in your favor, you\u2019ll likely be stopped out before you can realize any profit.<\/p>\n\n\n\n

So what\u2019s the solution?<\/strong><\/p>\n\n\n\n

Wait for the session to close at 5 pm EST before making any further considerations.<\/p>\n\n\n\n

That\u2019s it! I call this the settlement period, and it occurs each and every trading day between 4 pm and 5 pm EST.<\/p>\n\n\n\n

And if you are trading the 4-hour chart, wait for the next 4-hour candle to close before even thinking of committing any capital.<\/p>\n\n\n\n

The simple act of waiting for the next daily or 4-hour candle to close has kept me out of more dangerous situations than I can count.<\/p>\n\n\n\n

Notice that I said simple and not easy.<\/p>\n\n\n\n

There\u2019s nothing complicated about waiting for a candle to close. Anyone can understand the concept.<\/p>\n\n\n\n

The difficult part is having the patience and discipline to actually wait.<\/p>\n\n\n\n

Know that just because the market is moving, it doesn\u2019t mean you have to trade it. The little-known truth is that 99% of the volatility you see every single day is just a trap waiting for the unsuspecting trader.<\/p>\n\n\n\n

Quality setups don\u2019t come around often, but when they do, you have to be ready. If you\u2019re chasing volatility every day, you won\u2019t be ready.<\/p>\n\n\n\n

The First and Last Day of the Week<\/strong><\/p>\n\n\n\n

The first 24 hours of each new trading week is usually relatively slow. Market participants are just getting back online after their 48-hour hiatus.<\/p>\n\n\n\n

It\u2019s also when the markets are figuring out which direction they should head for the coming week.<\/p>\n\n\n\n

With this in mind, I tend to stay on the sideline each Monday\u2014unless I already have an established position from previous weeks, of course.<\/p>\n\n\n\n

On the other end of the spectrum, we have Fridays.<\/p>\n\n\n\n

The final 24 hours of the trading week is often marked by lower liquidity. As you may well know, technical analysis works better in highly liquid markets. That\u2019s one reason I switched from equities to Forex back in 2007.<\/p>\n\n\n\n

Moreover, I don\u2019t like taking on new risk before the weekend. The Forex market can sometimes gap quite aggressively at the week\u2019s open, and I don\u2019t want to get caught on the wrong side of a Monday gap.<\/p>\n\n\n\n

Between these two days, Friday is the worst offender in my opinion. The idea of opening a new position in front of a 48-hour window where I\u2019m helpless to do anything but watch doesn\u2019t sit well with me.<\/p>\n\n\n\n

So there you have it, Mondays and Fridays are the two worst days to trade, with the latter being even worse than the former.<\/p>\n\n\n\n

By the process of elimination, you can see that I like to open new positions between Tuesday and Thursday. I\u2019ve found that the best setups occur during these three days.<\/p>\n\n\n\n

By this time, market participants have settled in for the week. It\u2019s also far enough from the weekend to cut your losses if the market moves against you. Any quality setup that occurs between Tuesday and Thursday is fair game. I will sometimes trade on Monday, but the setup has to be top notch. It needs to be so good that I would have to be crazy to pass it up.<\/p>\n\n\n\n

Fridays are off limits in my book. You\u2019re better off waiting until Monday to reassess the situation. That way you don\u2019t need to worry about the market gapping against your position at the start of the new week.<\/p>\n\n\n\n

When You Aren’t in the Right Mental State<\/h4>\n\n\n\n

Trading is a game of mental discipline. Those who can keep their emotions under control come out ahead. We know what happens to those who can\u2019t.<\/p>\n\n\n\n

But no matter how disciplined and controlled you become, there will always be \u2018those days\u2019. I\u2019m sure you know the ones I\u2019m referring to here.<\/p>\n\n\n\n

Maybe you aren\u2019t feeling well or didn\u2019t get a good night\u2019s sleep. It could also be that you\u2019re busy with other tasks which means your thoughts are elsewhere for the day.<\/p>\n\n\n\n

Another dangerous scenario would be a losing streak. If you have lost the last three or four trades, chances are your emotions are on high alert.<\/p>\n\n\n\n

Whatever the case, if you aren\u2019t feeling up to the task of trading, then don\u2019t!<\/p>\n\n\n\n

There\u2019s no rule that says you must trade today. Even if there is an A+ setup sitting right in front of you, some time away from your charts may not be a bad idea. In fact, it usually helps immensely if you aren\u2019t feeling up to the task.<\/p>\n\n\n\n

And if you\u2019ve experienced a losing streak, one of the best things you can do is to take a break. Once you come back, try risking half of your normal position size until your confidence returns.<\/p>\n\n\n\n

Final Words<\/strong><\/p>\n\n\n\n

Knowing when to trade, and when not to, is critical as a trader. It will help keep your capital safe when conditions are volatile or markets are illiquid and capitalize when the time is right.<\/p>\n\n\n\n

One of the worst times for placing trades is immediately before or after high-impact news. These events range from central bank rate decisions to non-farm payroll.<\/p>\n\n\n\n

By waiting for the session to close at 5 pm EST, you avoid the \u2018chop\u2019 that often occurs around these events. I would estimate that 90% of the setups I take occur on the daily time frame. The rest happen on the 4-hour chart.<\/p>\n\n\n\n

Another time to avoid is the first and last day of the week, with Friday being the worst offender of the two. Taking on risk ahead of the weekend can be a risky endeavor. As for Monday, markets can be indecisive as traders recover from the weekend lull.<\/p>\n\n\n\n

Trading is a mental game. I would argue that it\u2019s 80% mindset and 20% mechanical. So if you aren\u2019t feeling at the top of your game, take a seat on the sideline. It\u2019s better to miss a setup or two than to risk a costly emotional meltdown.<\/p>\n\n\n\n

I have found that Tuesday through Thursday are the best days to trade. Just remember to not enter a position immediately before or after high-impact news. And last but not least, make sure your mental game is on point before risking any capital.<\/p>\n","protected":false},"excerpt":{"rendered":"

The location of the signal was spot on, but the timing was off. Before I scare you off with yet another factor you need to consider, let me tell you that it isn\u2019t all that difficult. In this post I\u2019m… Continue Reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[15],"tags":[246,17,39,248,245,48,247],"_links":{"self":[{"href":"https:\/\/forexrobo.trading\/blog\/wp-json\/wp\/v2\/posts\/601"}],"collection":[{"href":"https:\/\/forexrobo.trading\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forexrobo.trading\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forexrobo.trading\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forexrobo.trading\/blog\/wp-json\/wp\/v2\/comments?post=601"}],"version-history":[{"count":1,"href":"https:\/\/forexrobo.trading\/blog\/wp-json\/wp\/v2\/posts\/601\/revisions"}],"predecessor-version":[{"id":603,"href":"https:\/\/forexrobo.trading\/blog\/wp-json\/wp\/v2\/posts\/601\/revisions\/603"}],"wp:attachment":[{"href":"https:\/\/forexrobo.trading\/blog\/wp-json\/wp\/v2\/media?parent=601"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forexrobo.trading\/blog\/wp-json\/wp\/v2\/categories?post=601"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forexrobo.trading\/blog\/wp-json\/wp\/v2\/tags?post=601"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}