One of the keys to trading success is choosing the right trading hours. The reason for this is that there are times when liquidity is low. Therefore, it is quite dangerous for novice traders. In fact, taking advantage of market liquidity is one of the potential advantages of being a trader.
There is also personal time that should be properly managed to make a profit. Always remember, it’s not that you shouldn’t trade. Just need to increase the level of caution because it is quite risky. What are those moments? Here is the list:
1. Time after the big news
The first dangerous trading time is the time of big news, big news, such as news about companies involved in the context of stocks. news about inflation interest rate and non-farm payroll (NFP) in the context of exchange rates, etc.
because after the big news The underlying asset market is generally in a state of uncertainty. This uncertainty often makes market movements difficult to read. Therefore, it is possible for the market to move in the opposite direction of what the relevant trader wants.
So in general traders, especially new traders You will be asked to wait up to 4 hours or a moment after the big news appears. Until finally the market movements are clearly readable.
2. Beginning and end of the week
As mentioned at the beginning of this article. The trader’s advantage lies in his ingenuity in taking advantage of the asset’s price fluctuations to his advantage. The start and end of the week are generally the days when new traders open their trading applications. As new institutional traders plan their next trading direction.
Conversely, on Friday the level of trading liquidity is lower. This is because few traders are willing to take additional risks by opening positions before the weekend. As a result, trading on Monday has a lower level of price volatility than weekday volatility. (Monday – Friday)
One of the challenges for a forex traders is to know and adapt to the trading hours and days of forex market sessions in the world. The reason is that the world forex trading session may come when Indonesians are sleeping or busy at work.
Weekend trading has become one of the trading hours solutions for traders who remain employed outside of weekday trading. However, opening positions on Saturday and Sunday can be very risky.
There are applications or platforms on offer. weekend tradingBut there are not many traders who open trading positions during the weekends. The reason is that during these two days traders will rest or do other activities other than trading. As a result, the level of asset price volatility in these two days was lower than that of weekdays.
Therefore, not many applications or platforms offer weekend trading and not all assets can be traded in these two days. Therefore, weekend trading is quite suitable for novice traders.
The context is the same as weekend trading, i.e., holidays are a time for traders to focus on their other activities, including institutional traders. On holidays like Easter, Christmas, Thanksgiving In general, the world’s capital and forex markets are quiet. (Lack of liquidity)
One of the challenges traders face Especially international stocks and forex traders is to know the holiday schedule of these countries. You will not open a trading position.
Fortunately, today many applications and trading platforms are equipped with a calendar feature. of the country concerned when Holiday schedule adjustments Weekends and beginnings of the week can be difficult for novice traders. But I believe that over time You will be familiar with these settings.
5. When you’re in a bad mood
The fifth dangerous trading time is when you are in a bad mood to open a trading position. This is because trading positions opened in a bad mood often result in illogical trading decisions. resulting in loss
Therefore, traders need to develop a trading schedule on a regular basis. The goal is when it’s time to trade. A trader’s emotional state is ready to open a trading position. However, theory is easier than practice. There are times when it’s time for you to trade. But the night before, you didn’t get enough sleep, or the disaster suddenly happened.
6. When you’re too happy
In addition to the bad mood Another dangerous time to open a trade is when you are overly happy. Too happy which includes when you just win trades and make big profits.
It is not uncommon for traders who are just taking profits from trading to open new trading positions without careful consideration. This happens because the hormone dopamine is released by the brain and encourages traders to open positions again. resulting in a losing trader
Tips for managing your trading time
The existence of the most dangerous trading sessions above does not mean that you should not trade during them. It’s just that you need extra caution. So how to set trading time? Here are some tips:
- Know the trading rangeThe first step is to know the trading range you want to enter. Surely the opening hours of the New York Stock Exchange (NYSE) are different from the London Stock Exchange (LSE) and the Hang Seng? Like the Forex market, there are 4 interrelated trading sessions in the forex market. in choosing the right time Of course, you also need to know what kind of instrument you want to buy.
- adjust according to scheduleNot all traders make this profession their main job. Not to mention that traders also have to allocate time for other needs, so there needs to be some adjustments between the trading schedule and the trader’s main job and other needs. Unless the trader becomes a full time trader.
- adapt to risk. The six trading times above are the most dangerous trading times. Although traders are still allowed to trade at that time. But should be more careful. Especially for novice traders.
- Create a regular trading schedule.. The usual trading schedule acts as a benchmark. When to trade When to analyze and when to perform other activities This table comes in handy when it comes time to analyze and trade. You have prepared your mind and your mind. Discipline of this trading schedule is very important. But the theory is still easier than practice.
- save the important datesuch as the date and time of the announcement Non-Agricultural Sector (NFP)National and public holidays, Election Day (Presidential elections often cause stock market fluctuations), etc.