Financial Markets are now open for trading 24/7. With the advent of online investing you can now access some sort of financial market at any time of the day or night from anywhere in the world. This is a dramatic shift that was never possible in the days before the internet. Theoretically this is a great thing. It means that anyone has the opportunity to invest in markets no matter what their schedule is. With all of these available hours does this mean that you should trade whenever you want? In other words are there better times of the day or week to trade than others? We will explore that question in this article.
The fact of the matter is that just because a market is open does not mean that your trading is easy. Most financial experts believe that there are certainly better times than others to trade. Some bizarre hours, for instance, you may find that at 2AM on a Friday trading action is thin and spotty. This can work against you as you take a position, and then the asset does nothing or drops like a rock for no reason.
All of the techniques that work well for you during New York hours may be thrown out the window if you decide to trade during an obscure time frame. The fact is, most of the technical signals that you get to help you take positions are directly related to market action. These signals are designed for and work best in healthy volume and market conditions. When the market or asset is spotty and thin the odds are very good that the technique will just stop working.
So, the best times for trading are Monday through Friday during time frames where any of the major financial market hubs are open for business. London is open from 3 am to 12 Noon EST. New York is open from 9:30 to 4 pm EST. When London and New York are both open at the same time the conditions for trading are optimal. Tokyo, Japan is open from 7 pm to 4 am EST. Sydney, Australia is open from 5 pm to 2 am EST. If you see any action outside of these time frames the markets are likely very thin.
There is an actively growing over-the-counter (non exchange listed) market in Europe. This market trades in some obscure time frames like late Friday night and into Sunday morning. But so far, the action there does not even come close to the activity that occurs on the official exchanges during the prime time of the major financial hub cities.
So, the bottom line is this -- stick to the major exchanges and prime trading times unless you realize that you are gambling and not trading. Gamblers are encouraged to visit a real bricks and mortar or online casino for some action. Your odds at any point there are most likely much better than obscure times at the OTC markets. Happy Investing!