What you need to know about Forex trading on Friday
Hello ladies and gentlemen, Forex traders!
Friday. A relaxed day when there is a crazy weekend ahead, after which work Monday will come. How is this reflected in the market? How do big players behave on this day? Who leaves the position for the weekend, taking the risks?
Today we will figure out what to remember when trading on Forex on Friday, why this day candle is important, what tips can be drawn from the direction of the price on this day and consider some more important nuances that you hardly thought about.
What time does forex close on Friday?
The first thing worth mentioning is the time the Forex market closes on Friday. There is a clock in the market watch window in MT4, and most brokers close when the time on this watch approaches 23:59. Moscow time is either midnight or one in the morning, depending on what time it is now on the broker's server: summer or winter. There are also brokers that can close an hour or two earlier, for example around 23:00 Moscow time. You can find more accurate information on the website of your broker. For example, for Roboforex, the schedule is in the “Clients” -> ”Information” -> ”Market Hours” section.
Everything is described in sufficient detail, but keep in mind that a non-standard time zone may be used and you may need to google how this schedule relates to your local time.
However, in general, most brokers close at midnight Moscow time.
Friday News and NonFarm
Also, beginners should remember that on Friday at 15: 30-16: 30 (depending on what summer or winter time is now) in America, significant news, for example non-pharmacies, which can shock very much, often come out in the US dollar market.
Therefore, on Friday, do not forget to check the economic calendar, which is also on our website here.
Please note if there is any significant news in the calendar marked with three red lines - as, for example, today at 15:30.
So - today it makes no sense to trade and monitor the market. You can calmly leave it and go to rest.
Direction in the afternoon - the key to momentum on Monday
The next thing I would like to draw attention to is the movement in the second half of Friday, i.e. after 16: 00-17: 00 Moscow time and until the market closes. If during this period the price rises steadily - on Monday we should expect the continuation of this movement. Accordingly, if the price drops steadily - at least in the first half of Monday we can expect the continuation of this impulse. And we are interested in a clearly expressed and directed movement:
This is especially clearly visible and works on the USDRUB pair, which is shown in the screenshot above. If the same stable growth continues until the market closes, then on Monday it is worth waiting for the continuation of this impulse.
Why this happens, I think, is understandable: large players are being purchased, not being afraid that something will happen over the weekend. That is, they are confident in the absence of news, are confidently buying or selling confidently - and this means that on Monday we can wait for the continuation of the impulse.
The formation of the weekly candle
In general, the market does not like to change the shape of the weekly candle on Friday. Therefore, considering the chart on the W1 timeframe, namely, a practically formed weekly candlestick, we can assume what movement will be until the end of the day.
For example, this Friday, at noon on the EURUSD chart, the weekly candle has a rather long tail, which indicates that the bulls have already been taken out. Plus a pretty targeted price movement down. Even if you consider non-pharmacies - often they only endure the stops, and then the price is restored in just a couple of hours. So, most likely, the downward movement will continue until the end of the day, or the price will remain at about the same level. But expect some noticeable growth is clearly not worth it.
Or a weekly candle by 12: 00-14: 00 on Friday - full-bodied bull, or full-bodied (large body, small shadows) bearish - you should not expect a significant price movement in the opposite direction until the end of the day.
Accordingly, in this case, if you are trading intraday, looking for deals to sell, if the weekly candle is clearly bullish, does not make much sense.
Of course, if the weekly candle is slurred, for example, something like a doji, then the price can go in any direction, and it is difficult to predict something reliable on such a candle.
But a full-bodied weekly candlestick allows one to predict with sufficient accuracy the market movement on Friday afternoon: bearish - down, bullish - up. Well, or almost will not change - what happens more often than we would like ...
Why is Friday so significant?
A huge amount of Forex trading volumes is intraday trading. High-frequency and intraday traders account for up to 80% of market operations. And they all exit the market until Monday.
So who are they - the people who open positions on Friday and leave them for the weekend? After all, anything can happen over the weekend. These are large traders, various serious institutions that own more information than we or the media. At the same time, they agree to the risk of transferring transactions over the weekend, paying swaps. That is, these are very significant traders and it is worth looking at least at the direction of their positions. Therefore, what happens on Friday often has a significant impact on the further price movement, and can give an impetus to both Monday and the whole next week.
In addition, according to statistics Friday is often the minimum or maximum point of a weekly candle. For the same reason, we should expect continued directional price movement if it is present in the weekly candle.
And if you take a separate Friday candle D1, - if it has any of the signals on your trading system, or in general on Price Action - it is worth taking a closer look.
When to open positions at a signal on D1 - on Friday or Monday?
Many people ask the question: when is it better to open positions when there is a signal on D1 - at the market close on Friday evening, or at the market open on Monday?
The answer is simple: we open positions at the opening of the market on Monday. If there is a gap, we trade it, and if there is no gap, we trade our setup. Since if you open positions on Friday night, a huge gap can simply take out your stops on Monday and you will get a loss (plus your order can slip). Therefore, if you see some kind of signal on Friday night, it is better to open positions on Monday.
In addition to the foregoing, do not forget that on Fridays, many traders close deals and take profits, not wanting to transfer positions over the weekend. This may be due to both a possible gep and a desire to leave the position and calmly go on a weekend. Therefore, at the very end of the day, if there was a clear bullish trend - the price rolls back a little (bulls take profits), if there was a clearly bearish trend - the price moves slightly higher (bears close positions).