By William Robson
Everyone wants to know the perfect place and time to execute their trades. But if you have a look at the novice traders, you will be surprised to know that they are taking random trades without having any routine. Most of the time, they are losing money since they don’t take any strategic actions. To succeed in the retail trading industry, you need to know about quality trade executions.
In this article, we are going to discuss the worst time to trade the financial asset. Go through this article as it may change your life.
The Moment Before or Following High-Impact News
Volatility is what makes us money in the investment business. You can’t make money in a market that doesn’t move. We all were in a situation where things start to go our way almost instantly and don’t want to stop. We are left with a pile of cash after two days of riding 300 pips. Those have been beautiful weeks. They can, however, be extremely risky, especially for the inexperienced trader.
You know how risky transaction events like this can be if you have tried it before. Volatility can make us money but swapping an affair with a random outcome and market reaction isn’t the way to go about it. It also contradicts what price action traders do. The market provides indications on larger time frames, such as daily charts, which give dealers a trading advantage.
Trading the news has no advantage. This is undoubtedly true whether you are entering a position right before or right after an occurrence. Even if the market behaves and advances in your favor, you will almost certainly be stopped out before making any money. So, visit https://www.home.saxo/en-sg/products/commodities and try to understand how the news impacts the price of a trading instrument. As you learn about these factors, you should be able to scale your trades properly.
The Week’s First and Last Days
Each new trading week begins with a somewhat quiet first 24 hours. After a 48-hour absence, market participants are only going back online. It is also the time when the markets are deciding which way to go for the coming week. Fridays, on the other hand, are the complete opposite. Lower liquidity is expected in the final 24 hours of the trading week.
Also, do not take on any additional risks until the weekend. At the start of the week, the Forex market can gap violently, and never want yourself on a Monday gap considered the wrong side. So, there you have it, the two worst days to trade are Mondays and Fridays, with the latter being significantly worse.
When You Aren’t in the Right Mental State
Trading is a mental restraint game. Those who were able to keep their emotions in check come out on top. We have seen what happens to those who are unable. There will always be “those days,” no matter how well you follow a specific trading strategy. Maybe you are not feeling well or did not get enough sleep the night before. It is also possible that you’re preoccupied with other duties, which means your mind is elsewhere for the day.
A losing streak is another risky possibility. If you have lost three or four deals in a row, emotions are likely to be on high alert. At any time, if you feel horrible up to the duty of trading, do not do it! There is no requirement that you trade today. And if you are on a losing streak, taking a break is one of the best things you can do. Once recovered your confidence, try risking half of your typical position size until you have regained it.
Trading is, in general, a mental game. It is all about the mindset, with 80 percent being mental and 20 percent mechanical. Knowing when to trade and when not to deal is essential for a trader. When conditions are volatile, or markets are illiquid, it will assist you in protecting your wealth while also allowing you to capitalize when the timing is perfect.