Market volatility is the enemy of any strategies and trading advisors. The unpredictability of the market knocks out positions in the footsteps, technical indicators give the greatest amount of errors at the time of volatility, because of slippage, positions are opened at a far from the best price. Scalpers and professionals in volatile markets can earn about 50% of their entire income. For novice traders, these are days when it is better not to trade on the exchange and OTC markets.
When it is better not to trade on the stock exchange and forex
The most dangerous day for a novice trader is Friday, or rather the American session. At this point, the Asians have already left the market, European traders are beginning to turn off their positions, and in the United States, fundamental statistics are starting to emerge. Currency pairs are starting to “shoot arrows” in different directions at such a rate that traders do not have time to enter the market at a good price because of requotes and slippings. Open orders are closed in the footsteps. Toward the close of the session business activity falls and earn will not work at all. Monday to 11 am – a time when it is better not to trade on the stock exchange and Forex – large investors and market makers are only determined by their actions and technical indicators will not show an objective picture.
6 days when it is better not to trade on the stock exchange and forex:
- The last day of the month. On this day, many managers report to portfolios on investors. Because unprofitable positions are closed, profitable – are increasing. Long-term strategies have little or no effect on volatility (if the drawdown is within the allowable range). In the short term, the position is better to fix;
- the first day of the month. The reason is the same – investors and traders only form new strategies, which can cause volatility in the stock and currency markets;
- Non-farmPayrolls publication day. One of the most influential and controversial US reports, which is published on the first Friday of the month. The market reaction does not depend so much on the data itself, but on the expectations of investors and whether they were previously incorporated into the value of the US dollar. Report indirectly affects stock markets;
- options exercise day. In the US stock market, options are executed weekly, but the most dangerous day is the third Friday of the month. On this day, the options are closed so as not to receive shares on the contracts sold before;
- the day the Fed makes a decision on the discount rate. Market volatility can be influenced not only by the rate decision, but also by related statements;
- The day of publication of the company’s financial statements. Influences the value of shares of individual companies For successful trading, you need to understand the financial multipliers that begin this day on the stock exchange and Forex is better not to trade.
Anyone who is willing to take risks or wants to hone skills, we recommend training in volatile markets on cent accounts!