Much like trading on Fridays, there are many misconceptions and rumours about trading forex on Mondays. Is there actually any truth to this? Are Mondays a terrible day to trade forex? Let’s find out more…
Forex trading on Mondays is a great idea. Monday usually has a large amount of trading volume and there are often week long swings that start on the Monday session opens. There is no truth to the ‘don’t trade on Monday’ rumour.
Is Trading Forex On Mondays A Good Idea?
If you’ve been involved in any forex trading forums over the last few years, you’ll know that there is a rumour regarding trading on Mondays. Many profitable traders claim that they don’t like opening trades on Monday as the market isn’t favourable.
The reality is that this isn’t true, at all. Mondays are a great day to trade forex. There is usually a huge amount of volume and liquidity in the markets on Mondays due to the number of traders who come back from the weekend.
This means that it’s actually advantageous to be trading on Mondays as you can get in at better prices with higher volumes, compared to other days of the week. Banks and institutions are getting back into positions and starting to scale into their trades.
If you look back at previous weekly charts, you’ll notice that large weekly moves do tend to take place on Mondays. This, of course, isn’t the case for every week but if you happen to take a position on Monday and it runs all week – you’re going to have yourself a lovely profit.
What Kind Of Trades Should You Enter On Monday?
If you’re choosing to trade forex on Monday, there are various different options open to you in terms of what kinds of setups you’d want to be taking…
Scalping The Forex Market On Monday
Scalping the forex markets works great on Mondays. The reason for this is the fact there has been no higher time frame movement or candles printed early into a trading week. However, if you drop down onto the 5 minute or 15 minute time frames, you’re going to see a huge amount of movement and candles for you to trade with!
Swing Trading On Monday
Swing trading or day trading is great in the forex markets on Mondays. This is because the market has all week to swing in your direction. If you’re able to analyse over the weekend and execute a trade early on Monday, you may be able to ride the whole weeks momentum. This would usually equate to a huge amount of pips and profits!
Backtesting The Forex Markets On Monday
If you think the market is slow, you could use this time to backtest a forex trading strategy. During this time, you can test your strategies on past data and find improvements. Backtesting is without a doubt the most important aspect of trading and it’s very wise to use slower market times to brush up on this skill. I have a full backtesting guide here, if you’re looking to try it!
What Is The Best Day Of The Week For Forex Trading?
Simply put, the best time to trade forex is anytime besides a Friday. On Monday the market is starting to open – liquidity is flowing, volume is increasing and there are a huge amount of trading opportunities both for swing traders and scalpers.
On Tuesday, Wednesday and Thursday, the volume is great. Thanks to the $6.6 flowing through the markets every day, there are plenty of trading opportunities for both swing traders, day traders and scalpers to make use of.
On Fridays, the market is winding down. There are typically a lot of news events, paired with low liquidity and random price action. I would advise not holding trades through Friday and into the weekend unless you’re in a very large swing. For day traders, this can be extremely risky. I’d highly recommend that you try not to trade forex on Fridays, unless you can’t help it!
In Summary – Should You Open Forex Trades On A Monday?
In conclusion, it’s absolutely fine to trade forex on Mondays and there is no truth to this rumour at all. It’s a great day to trade and you can expect high volumes and liquidity in the forex markets due to the coming back of traders from their weekends!
Mondays usually have very large moves and these usually follow through for the rest of the week… if you execute the right trade, that is.
Do you trade forex on Mondays? Let me know in the comments below…