What You Need to Know About Trading Forex on Friday

Hello, ladies and gentlemen, forex traders!

Friday. A relaxed day with a crazy weekend ahead, after which the working Monday begins. How does this affect the market? How do major players behave on this day? Who leaves positions open over the weekend, taking on the risks?

Today we will sort out what you should keep in mind when trading forex on Friday, why this daily candle matters, what clues can be drawn from the price direction on this day, and we will look at several more important nuances you have probably not thought about.

The first thing worth mentioning is the forex market closing time on Friday. In the Market Watch window in MT4, there is a clock, and most brokers close when the time on that clock approaches 23:59. In Moscow time, this is either midnight or 1 a.m., depending on whether the broker server is currently on summer or winter time. There are also brokers that may close one or two hours earlier, for example around 23:00 Moscow time. You can find more precise information on your broker's website. For example, at Roboforex the schedule is located in the “For Clients” -> “Information” -> “Market Hours” section.

Everything is laid out in quite a lot of detail, but keep in mind that a non-standard time zone may be used, and you may need to google how this schedule corresponds to your local time.

However, in general, most brokers close at midnight Moscow time.

Also, beginners should remember that on Friday from 15:30 to 16:30 (depending on whether it is currently summer or winter time), significant news on the U.S. dollar often comes out in America, for example NonFarm payrolls, which can shake the market very strongly.

Therefore, on Friday do not forget to check the economic calendar, which is also available on our website right here.

Pay attention to whether there is any significant news in the calendar marked with three red dashes, as for example today at 15:30.

That means there is no point in trading and watching the market today anymore. You can calmly leave it and go relax.

The next thing I would like to draw your attention to is the movement in the second half of Friday, that is, after 16:00-17:00 Moscow time and up until the market closes. If during this interval the price rises steadily, then on Monday you should expect this movement to continue. Accordingly, if the price steadily falls, then at least in the first half of Monday you can expect this impulse to continue. Moreover, 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 steady growth continues until the market closes, then on Monday it is worth expecting this impulse to continue.

Why this happens, I think, is clear: major players are buying without being afraid that something will happen over the weekend. That is, they are confident there will be no news, they buy confidently or sell confidently, and this means that on Monday we can expect the impulse to continue.

In general, the market does not like to change the shape of the weekly candle on Friday. Therefore, by looking at the chart on the W1 timeframe, namely at the almost formed weekly candle, one can assume what movement there will be until the end of the day.

For example, this Friday, at noon, on the EURUSD chart, the weekly candle has a fairly long tail, which indicates that the bulls have already been taken out. Plus, there is quite a purposeful price movement downward. Even if you take NonFarms into account, they often only take out stops, and then the price recovers literally within 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 you clearly should not expect any noticeable growth.

Or if by 12:00-14:00 on Friday the weekly candle is a full-bodied bullish one, or a full-bodied (large body, small shadows) bearish one, then you should not expect a significant price movement in the opposite direction before the end of the day.

Accordingly, in such a case, if you trade intraday, there is not much point in looking for sell trades if the weekly candle is clearly bullish.

Of course, if the weekly candle is vague, for example something like a doji, then the price can go in any direction, and it is difficult to forecast anything reliable from such a candle.

But a full-bodied weekly candle makes it possible to predict the market movement in the second half of Friday with sufficient accuracy: bearish means down, bullish means up. Or it will hardly change at all, which happens more often than we would like...

A huge amount of trading volume in the forex market is intraday trading. High-frequency and intraday traders account for up to 80% of operations in the market. And they all exit the market before Monday.

So who are they, those people who open positions on Friday and leave them over the weekend? After all, anything can happen over the weekend. These are large traders, various serious institutions that possess more information than we or the media do. At the same time, they accept the risk of carrying trades over the weekend and pay swaps. That is, these are quite significant traders, and the direction of their positions is worth watching at the very least. Therefore, what happens on Friday often has a noticeable effect on the further price movement and can give momentum both for Monday and for the whole next week.

In addition, according to statistics, Friday is often the minimum or maximum point of the weekly candle. For the same reason, one should expect the continuation of the directional price movement if it is present in the weekly candle.

And if we take a separate Friday D1 candle, then if it contains any signal from your trading system, or in general from Price Action, it is worth taking a closer look at it.

Many people ask the question: when is it better to open positions if 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 market open on Monday. If there is a gap, we trade it, and if there is no gap, we trade our setup. Because if you open positions on Friday evening, a huge gap can simply take out your stops on Monday and you will incur a loss (plus your order may slip). Therefore, if you see some kind of signal on Friday evening, it is better to open positions on Monday.

In addition to the above, one should not forget that on Fridays many traders close trades and lock in profit, not wanting to carry positions over the weekend. This may be connected both with a possible gap and with the desire to exit the position and calmly head off for the weekend. Therefore, at the very end of the day, if there was a clear bullish trend, the price pulls back a little (the bulls take profits), and if there was a clearly bearish trend, the price moves slightly higher (the bears close positions).

Respectfully, Pavel Vlasov TradeLikeaPro.ru