Best Day of The Week to Buy Stocks? Currently, in many financial markets, the trading hours are very long. And although sometimes it may seem like a great advantage, it can also be a drawback to achieving good results. And it is that not all time slots are equally conducive to trading.
Nor are all days of the week the same, and that depends largely on the financial instruments with which we are working. What’s The Best Day of The Week to Buy Stocks? We will tell you.
What Are The Best Times Of The Day To Trade and What’s The Best Day Of The Week To Buy Stocks?
In the first place, we are going to make a differentiation. Depending on whether we are talking about investing in the stock market with shares or doing it in other instruments. Such as currencies, raw materials.
The Operation on the Stock Market Depending Upon What’s The Best Day Of The Week To Buy Stocks?
If we talk about trading with shares, the operation in most financial markets takes place between the time slots of 8-9 in the morning until 5-6 in the afternoon. Within each of the sessions, we can distinguish two periods clearly. Both differentiated from the rest that would be the opening and closing.
Opening and closing
Both the open and the close are times when there is much more volatility than normal. In those moments and in the minutes immediately following in the case of the opening. Or before in the case of the closing. These are the periods in which we can have longer-distance movements. Although trying to get on the market in those moments also has a somewhat higher risk.
At the time of the opening, we must also take into account that we can find the so-called holes. Or gaps in the price. A gap in the price of stock occurs when there is a difference between the opening price of one session. And the closing price of the previous session. This is a circumstance that, although it may seem like a problem, can be an advantage. And is a situation used by many traders to operate.
Other interesting moments about when to Buy Stocks?
But…. and during the rest of the day? Well, during the rest of the day most of the time we will see how the price is developing the trend marked at the beginning of it. That is why it is important to try to trade in the early stages. Because we will enter at the beginning of the trend.
Therefore, there is some difference when we are operating American markets. And the main difference is that the American markets are more influenced by macro news. Although they are sometimes moments of some uncertainty. We must take into account the moments of publication of the most outstanding news, especially if we operate with indices. We must always have a good economic calendar at hand that allows us to know the most important events that may affect our operations.
The Operation With Foreign Exchange, Raw Materials Or Other Assets
You must also know about the assets to know What’s The Best Day of The Week to Buy Stocks? There are other assets that, due to the characteristics of the markets in which they are listed. They have a different hourly distribution of their operations. In the case of financial assets in international markets such as currencies in the Forex market. Also, raw materials or the like that are listed in different markets. And on many occasions, we have a continuous listing, ranging from Monday to Friday.
This undoubtedly expands our trading possibilities from the point of view of the number of hours we can spend in the market. In these cases we can choose between two options:
- Restrict operations to certain time slots with the most movement. If possible during the hours of the day when we have the most activity. (operating at odd hours is never a good idea).
- Operate throughout the session but restrict our market entry criteria much more by introducing a factor. In this case that allows us to assess the activity in the market, such as volatility.
Details of Best Day of The Week to Buy Stocks
The first option has the advantage that much less activity is required on our part. And the disadvantage that we are going to “disconnect” from the market. And it may be that sometimes we lose entry opportunities. In the case of the second option, it can give us greater opportunities. But it makes it necessary to be more aware of the market. And can cause us greater stress, which is often counterproductive.
A good piece of advice is to analyze our operations. And see at what times or market moments our operations are most effective and it will be the market itself that tells us what to do.
The following is an example of the hourly distribution in a currency trading system that operates in different assets at the same time. In which we can see that the statistics that it draws us are similar to the comment that we made before. In an asset with price quotes from Monday to Friday, we see how the hours in which most operations take place are 8-9 am and 2-3 pm. That is, the so-called European Opening and the American Opening. . The start time of the markets with the most volume (Europe and USA) is the best time to operate in assets of this type. Because the market will give us more entry opportunities.
What are the best days of the week to trade?
In addition to the schedule, we can also ask if there are days that are better to operate than others. Despite the differences between assets as well. We can talk about certain general concepts that can serve as a basis for making our first decisions. And you will know What’s The Best Day of The Week to Buy Stocks?
Although there can always be exceptions. As a general rule, the most convenient operation. And the one that usually brings more benefits is the one that can be done in the second part of the week. Opening positions on Tuesday or Wednesday and closing them on the same Wednesday, Thursday or Friday. Although this may be different depending on our trading strategy. Our profile as traders or the time frame of our operations. For a trader who tries to keep his operations from going over the weekend, a good approach could be:
Monday is basically a positioning day. Where the price has to define a bit the trend that it is going to take during the week. Therefore it is quite common to see fairly flat sessions until the asset in question takes a direction determined, bullish or bearish. This phase can consume several hours, and therefore makes Monday a day on many occasions with fewer opportunities to enter the market. And, above all, with fewer guarantees. If the price does not have a clear direction and begins to oscillate, it is easy for it to change direction or give us false signals).
It depends a lot on the previous day. If during the day on Monday we have seen a defined direction. It is more likely that we will see interesting movements on the second day.
Without a doubt, it is the day that marks a turning point in the market. It is the middle of the week and if we have come this far by controlling our losses. And are positive or slightly negative, we have a good chance of closing our week without losses. It is a day where we can already see clearer positions.
very marked on several occasions. Because it is a day that there is usually important news that can move the market. And there can be interesting movements among traders in order to close open positions in previous days.
The operation of this day will be conditioned many times depending on the result of that week. In weeks with a positive balance and with open positions, we will try to look for good closing opportunities to make cash, and in weeks with a negative closing, our precaution will be more focused on not opening positions that could increase our losses, taking into account that we may have to leave them open for the weekend. To highlight the fact that is repeated many times that in weeks of very strong movements, the day in the USA (the afternoon here in Europe), is usually profit-taking, so the price changes direction and ends up moving in against the trend of the week.
As mentioned earlier in the article, the hours of operation of the foreign exchange market, both its opening and its closing, coincide with the opening and closing hours of some of the most important and powerful exchanges in the world, this is possible thanks to which is open 24 hours a day.
That these hours coincide with the opening and closing of these influential stock markets is no coincidence, since it has been shown that the best times with the highest profitability and volume of operations occur when these factors coincide.
The most specific examples of this are the following hours that have been proven to be the best within the hours in which the Forex market operates:
- The first is between 8:00 GMT and 16:59 GMT (for Spain it would be 9:00 and 17:59 Spanish time) which coincides with the opening of the London Stock Exchange, in turn there is also a greater number of traders operating in Forex, which generates a large trading volume since most of the daily operations of this market take place at this time.
- The second is from 1:00 p.m. GMT – 2:00 p.m. Spanish time, which coincides with the opening of the New York Stock Exchange.
- The third schedule is from 17:00 GTM – 18:00 Spain time, which coincides with the closing of the London Stock Exchange.
Regarding the most profitable days to operate in this market, it is famous that Thursdays and Fridays tend to be the most volatile of the week.
According to some financial analysts and experts on the subject of indices, the best time to operate them is from 8:00 to 11 or 12 PM Spanish time. They explain that this happens because until now the US futures markets have not yet opens, that is, only European futures are trades. This means that after 12 o’clock, they usually wait for the arrival of macroeconomic information from the United States.
Along these same lines, there is a second period of time that is also of interest to investors as it represents relevant movements in the markets, and it is from 3:30 p.m. with the opening of Wall Street until approximately 5:30 p.m. A theory of financial experts claims that European futures build their own kind of “personality” prior to the opening of Wall Street.
Naturally, both the choice of the best hours of the day and the best days of the week to trade is a matter very much at the discretion of each trader and there is no common pattern for everyone. Depending on our strategy and market, we can detect certain trends or situations that make our operations more profitable by operating on certain days and hours.
This will mark by the experience. If you are still in an initial phase as a beginner in the world of trading, a tool that is useful to you is the free demo accounts offers from most online brokers: Brokers with demo accounts
In a demo account, you can practice with a virtual balance, in very similar conditions to those of an account with real money but without putting your capital at risk. You can analyze the behaviour of the assets that interest you and open positions from which you can draw your own conclusions about the most favourable days and hours to operate, as well as gradually optimize your strategy. To use a demo account correctly, I recommend that you also take a look at this article: How to use a demo account to learn how to trade?
I trust that this article has been interesting for you and helps you to solve doubts. As always, your comments or opinions are welcome (you can use the comment form that you have a little further down) and also do not hesitate to share this article on social networks so that it reaches other traders to whom it may be useful. Thanks.