The day has come for trading. You’ve set aside some savings and there’s no changing your mind about it.
The goal in your mind is to trade and get some profits for yourself.
Well slow down, partner! Like with everything else, there’s a right, and a wrong time, the same goes for trading.
But fear not! We’re here to break it down for you, so you have at least one less thing to worry about!
Buckle up, and let’s get going!
Price fluctuations
Some thing that you probably picked up on in your day to day life is that prices fluctuate. Be it with things like products that go “on sale” when they’re near their expiration date or when an old collection of clothes needs to make room for a new collection.
Another good example is tickets for concerts, or sporting events. Come to think of it, tickets for any kind of event. When time is running out, organizers rush to fill the venue up, so the prices go down.
On the other hand, it’s not like prices always go down. Let’s use the examples that we already have. So, if a collection of clothes is going really well, then a company might make a sub brand of those. Think of Air Jordans as an example.
The other example we used was for ticket sales. Now, just try to remember, how many times have you witnessed tickets for a concert being sold out in one day. Afterwards, people try to re sell those tickets at a higher price.
That my dear friends is the basic principle of supply and demand.
Why have we used these examples?
To show you that the principle of supply and demand is everywhere. So, it must be there with stocks, currencies, and CFDs too, right? Exactly!
Stock price fluctuations
We’ve already gone over why prices change, but there’s a lot more that’s impacting the fluctuations of stock prices.
The market usually figures out how much a stock is worth, and, to its credit, it usually does a good job of determining the price. However, there are things such as rumours, new findings, broader economy, natural disasters even, which can influence the price of a certain stock or a currency. But, since we aren’t focusing on a certain stock, rather, all of them in general, let’s then try to determine if there’s a global guide on what’s the best time to trade!
Is there a best time of day to trade?
In short, the best time is around midday.
The long answer, is that you don’t want to get ran over if you’re an inexperienced trader. You might think “why would I get ran over? “ . Well, prices fluctuate based on the news that affect the stock in question. Seeing as how the stock market isn’t operational 24 hours of the day, the news which might affect a particular stock, affects it when the gates open. People are all over the place, and it can be quite chaotic, if something in fact did happen overnight.
Sure, if you’re an experienced trader, you probably could make a quick profit here, but if you aren’t it’s best to steer clear in the first couple of hours of trading.
The last hours of the day are similar, due to some wanting to capitalize on a particular stock, people rush opening some trades, regardless of whether they close them or leave them open for the next day opening hours.
So, like we already mentioned previously, the best time for an inexperienced trader is probably around midday.
If we talk about different Forex brokers, UFX is undoubtedly an amazing broker. You can freely execute UFX trading once you have enough data about this broker.
Any specific day of the week?
Yes, of course! But it’s the day that everyone hates unfortunately, Monday if you are a beginner. You’ll just have to learn to love it then.
The reasoning behind this is that, most traders, like everyone who has a Monday – Friday job, are not so thrilled to be back there.
Another very important thing to note, according to some studies, is that Fridays are usually when companies relay bad news, if they have any. In turn, the market start responding on Mondays. So that’s another reason why Mondays are viewed as the best days to trade, they are slower than, for example, Thursday (which is the day with the most volume and the most volatility in the market).
We cannot highlight enough that, if you are inexperienced, you will want to choose a quieter time of the day to trade!
Which month is the best one to jump in?
Stocks usually fall in the middle of the month, while the rise is happening when it’s finishing, in most cases. Same thing happens for the actual months of the year. Everyone is very excited, they have a new budget to start allocating for January until May.
After these months, volatility might start slowing down for break time! Yes, you guessed it, Summer, who wants to be worried about their savings or paying attention to market news on a Tuesday at 8am.
It really depends on which stock and instrument you pick tough, because there’s no sure-fire way to really tell.
The second-best time to see the market moving would be after the holidays, when people want to finish off the year on a pick. Careful with what you wish for, do not ever overtrade and always have a clear Money Management strategy in place.
Your best bet when deciding this should be to go with a period between the 10th and 15th days of the month. While the selling time should be when the prices rise, which is, like we said, at the end of the month.
Conclusion
What happened in the past, isn’t necessarily going to be repeated. Don’t take the history of a stock or a currency pair as an absolute indicator of its future performance.
See what happened with Huawei recently. There are things which you can’t know until they happen unfortunately.
Try to use the info in this article as a guiding tool, rather than exact instructions on how to trade. Do the math, see what option makes the most sense, and don’t hesitate if you’re sure.
