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Novice traders often do not attach much importance to the trading time, if there is a signal, then you can enter. However, the effectiveness of the trading system on different days of the week can be strikingly different, and therefore it is very easy to increase the effectiveness of the strategy simply by excluding these days from the trading process. Binary options are an excellent springboard for traders of any skill, but only knowing all the subtleties can you trade most effectively. Let’s look at what, in fact, the specifics of trading on different days of the week, and how this can affect the readings of your trading system.
As you know, many binary options brokers allow you to trade currencies on weekends. This is a very attractive offer from a trader’s point of view, as it allows you to be in the market almost 24/7, which means you can earn even more. Also, on weekends, news is often released that affects the exchange rate, which can be traded with traditional brokers only from the opening of the market on Monday.
Greed can destroy any system, however, and weekend trading is no exception. The fact is that the source of the weekend quotes, as a rule, is the binary options broker itself, which raises great doubts about their authenticity. How much do you think you can earn on drawn quotes?
Personally, I believe that there are no patterns in a random walk, but they are in the real market, where the price collects many factors of both fundamental and technical nature. Trust me, weekend trading has nothing to do with the real market, being essentially just a marketing ploy.
The exception to this rule is cryptocurrencies traded in a decentralized manner 7 days a week. Binary options and cryptocurrencies are a fairly new and evolving instrument, so trading on weekends is quite possible to be within a certain class of strategies.
Start and end of the week
There is a concept of a normal market, that is, when an instrument is not too flat, has stable liquidity and is not too volatile . Classifying working days by this parameter, we can say that Tuesday, Wednesday and Thursday are the most favorable periods for trading in almost any system. Thus, if you already cut the working schedule , then first you need to exclude Monday and Friday from trading.
Actually, why is it not recommended to trade on Friday. First, there are many economic reports coming out on Friday, often causing big market surges. Surges like these destroy market patterns, and if you hit one, you will probably lose.
Also, at the end of the week, many large players close their positions, which is the reason for a significant increase in volatility. When large volumes are uploaded to the market , its behavior becomes difficult to predict, and accordingly, many strategies cease to function normally.
On Monday, on the contrary, the movement is usually quite sluggish, but erratic. This is because many are trying to enter the market at the beginning of the week. Also, the market often gaps , gaining momentum over the weekend. If your strategy does not use this price action, Monday can also be excluded from trading.
Trade on holidays
The abnormal market period does not end on certain days of the week. Red calendar days and bank holidays also have a strong impact on price behavior. A striking example is New Year and Christmas . Professional traders usually avoid trading during this period, as it is extremely difficult to make money in an unstable and illiquid market, and the best strategy for this case is to just wait it out.
If you still decide to trade on holidays, just be aware that completely different patterns operate during this period, which means that the approach to trading should be completely different. Trying to pull a trading system developed for one type of market on something radically different from it is more expensive.
In conclusion, I would like to say, if you are a beginner , and you have not yet studied such subtleties, try to carry out the main part of the operations from Tuesday to Thursday. Binary options are flexible enough that you will develop your own time management tactics over time. In any case, this will have a positive effect on your trading performance. The rest of the time, rest, study the market, test strategies – this will be much more rewarding and productive pastime than trying to profit from an abnormal market.