The 3 Worst Times to Trade Forex (And When to Trade Instead)

by Justin Bennett  · 

December 14, 2017

by Justin Bennett  · 

December 14, 2017

by Justin Bennett  · 

December 14, 2017

Woman stressed out at computer

Everyone wants to know where to buy or sell a particular market.

Is the 1.1800 area primed for a short or should you wait for 1.1900?

But the truth is, trading is as much about knowing when not to trade as it is knowing where to enter a position.

That may sound like the same thing at first, but I assure you it isn’t.

For instance, the EURUSD may have formed the perfect bearish pin bar at resistance, but if it occurs right before an ECB rate decision, it isn’t the right time to trade.

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’t all that difficult. In this post I’m 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.

I’ll also share a few questions to ask yourself to make sure your mental game is on point.

Read on to learn the best and worst times to trade Forex.

1. Immediately Before or After High-Impact News

Road sign for market volatility As traders, volatility is what makes us money. You can’t profit from a market that never moves.

We’ve all been in one of those positions that takes off almost immediately in our favor and doesn’t want to stop. And after two days of traveling 300 pips, we’re left with a boatload of cash.

Those are good weeks. But they can also be incredibly dangerous, especially for the novice trader.

You witness how an increase in volatility can produce profits out of thin air.

On the surface it all seems quite innocent. After all, what’s wrong with observing that higher volatility equals greater profits?

Ah, now you see where I’m going with this. You know that news, particularly high-impact events like rate decisions and non-farm payroll, trigger volatile conditions.

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’t the way to go about it.

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.

There’s no edge in trading the news. That goes for entering a position immediately before or after an event.

Even if the market behaves and moves in your favor, you’ll likely be stopped out before you can realize any profit.

So what’s the solution?

Wait for the session to close at 5 pm EST before making any further considerations.

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That’s it! I call this the settlement period, and it occurs each and every trading day between 4 pm and 5 pm EST.

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.

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.

Notice that I said simple and not easy.

There’s nothing complicated about waiting for a candle to close. Anyone can understand the concept.

The difficult part is having the patience and discipline to actually wait.

Know that just because the market is moving, it doesn’t 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.

Quality setups don’t come around often, but when they do, you have to be ready. If you’re chasing volatility every day, you won’t be ready.

2. The First and Last Day of the Week

Chalk board showing days of week 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.

It’s also when the markets are figuring out which direction they should head for the coming week.

With this in mind, I tend to stay on the sideline each Monday—unless I already have an established position from previous weeks, of course.

On the other end of the spectrum, we have Fridays.

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’s one reason I switched from equities to Forex back in 2007.

Moreover, I don’t like taking on new risk before the weekend. The Forex market can sometimes gap quite aggressively at the week’s open, and I don’t want to get caught on the wrong side of a Monday gap.

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’m helpless to do anything but watch doesn’t sit well with me.

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

By the process of elimination, you can see that I like to open new positions between Tuesday and Thursday. I’ve found that the best setups occur during these three days.

By this time, market participants have settled in for the week. It’s also far enough from the weekend to cut your losses if the market moves against you.

To wrap up, here’s how I approach this…

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.

Fridays are off limits in my book. You’re better off waiting until Monday to reassess the situation. That way you don’t need to worry about the market gapping against your position at the start of the new week.

3. When You Aren't in the Right Mental State

Man feeling stressed and tired 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’t.

But no matter how disciplined and controlled you become, there will always be ‘those days’. I’m sure you know the ones I’m referring to here.

Maybe you aren’t feeling well or didn’t get a good night’s sleep. It could also be that you’re busy with other tasks which means your thoughts are elsewhere for the day.

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.

Whatever the case, if you aren’t feeling up to the task of trading, then don’t!

There’s 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’t feeling up to the task.

And if you’ve 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.

Final Words

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.

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.

By waiting for the session to close at 5 pm EST, you avoid the ‘chop’ 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.

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.

Trading is a mental game. I would argue that it’s 80% mindset and 20% mechanical. So if you aren’t feeling at the top of your game, take a seat on the sideline. It’s better to miss a setup or two than to risk a costly emotional meltdown.

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.

Your Turn

When do you think is the worst time to trade the Forex market?

Leave your comment or question below and I will respond shortly.

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  1. For me it’s not an opinion but a complement. Thank you for yet another good lesson. But I have to agree with you, I have seen the market being tired on Monday and Friday. I blew my account on high-impact news on few ocassion before, so I don’t want anything to do with it.

  2. Dear sir,thank you so much for your educational materials,I find to be very helpful and very encouraging to me,as am trying to gain an edge to be consistently profitable as a daily forex trader.
    I will like you to send me more educational materials,as your articles sit well with me and this are the things am still learning as a daily trader.

    Thank you sir.

    1. From my own experience, use extreme low volumes instead of staying aside, but that’s if you have good sentimental analysis of that pair, I make quite some cash with high impact news, I’ve been caught on the wrong side too but that’s fewer than the right side,

    2. The best thing to do little before high impact news is to place sell and buy orders at the same time with risking %2 of your capital. No matter what direction the market goes you only lose %2 and your profit is bigger then what you have risked on the trade.

  3. Excellent post Justin! I don’t usually trade on Mondays or Fridays either..The best day it seems for me is on Tuesday and Wednesday 🙂

  4. Thanks for the heads up. Mondays are slow indeed. But as for me, I have observed that markets move on Wednesday, Thursday and Friday. I rarely hold trades over the weekend. I use daily chart for setups but 4hr chart for entry and exit.

  5. Completely agree with everything. Worst day for me is Friday, as you said, the wait and potential for gaps on open Monday is too stressful. That said, do you employ any different kind of approach with trades carrying over to the next week?

  6. I totally agree with your comments, Justin. Valuable confirmation! How much before the end of session would you resist trading? Cheers, Keith

  7. Thank you for all the free information you provide on your website. If you trade mainly on the daily time frame and enter a trade on a Thursday, do you close it out on a Friday so as to avoid holding it over the weekend?

  8. Awesome post. I had given up on forex before now but applying your methods have made me believe I can still make it here. Thanks for sharing your knowledge.

  9. Hi Justin,
    You are there again as usual with your wonderful and insightful articles. This is so helpful to me, now that i am still battling with my emotions. I think i need to be more disciplined and work on my emotions. thanks a million. Please more articles on how to handle emotions in trading the forex market will be highly appreciated.

  10. Thanks for the heads up.I also think that the first two weeks of the month is the worst time to trade coz it contains news that move the market.

  11. Nice lesson justin. I had a question here, my grandpa said that trading in the end of the year is not a good idea. Its that right?

  12. you are on point as always dear Justin. I concur that Fridays are the worst days to trade, but also to me another experience of when not to trade is placing a trade right after a major win. I have noticed that the joy and excitement this brings often leads to a lot of miscalculations or uneven analysis. So, to me after series of major wins, step aside till the emotions are settled. Thanks.

  13. Dear Justin, thank you very much for this material, that is very interesting and helpful, because it is the way how to think about trading. I hope that I will be able to follow all your instruction and get on the right successful way in my trading. Thank you. Milan

  14. hi, Thank you for your guide. I had some questions. Please answer.
    1.If we arrived the market on Tuesday and did not reach the target by Friday, we should leave the market on Friday?
    2-If Friday we arrived at the trigger we would go to the market or not؟

  15. First of all, i thank you so much for the experience of yours that you have voluntarily shared, more power to your elbow. sir, I’m a Forex trader and i have traded for like a year now with the real money, not demo this time, even though i had practiced with the demo before trading with the real money, like i was instructed by my instructor when i began. Sir, there is where i find much more interesting in your analysis . . ., where you talked about when and when not to take position.Correct me if i misquote you, you said it isn’t advisable to take any position if the first initial candle is not broken. I’m bothered as to how close the stop-loss would be from where position could have been earlier initiated, considering the manner at which the market price movement works (zigzag). Don’t you think that by the time you enter the trade after the first candle is broken, the market price movement would have been close to your take-profit level if you had entered earlier?

  16. Thank you for this insight. I have to fully agree, as i lost my capital on those 3 areas. Well, it is an expensive education for me, the hard way

  17. Thank you very much for dendisg me an education materials.Its a big help for a new trader like me . I’m hoping you will share more materials on us. Thank you.

  18. A question sir… for trading from Tuesday to Thursday… based on the Daily timeframe, what would the potential average pip range that can be achieved? 100 – 200pips? Thanks

  19. Now another thing for 2018 i am going to see what high impact events are coming up before i place a trade. this article really helps, thanks Justin.

  20. Thanks a lot.So what about the early taken stop order or limit order? Should we close them before a highly impacted comming new?

    1. I’m sorry I mean to say Monday and Friday,and again to not enter a position immediately before or after high-impact news

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