Worst Times to Trade:
* Sundays - everyone is sleeping or enjoying their weekend!
* Fridays - liquidity dies down during the latter part of the U.S. session.
* Holidays - everybody is taking a break.
[B]* Major news events - you don't want to get whipsawed![/B]
* During American Idol, the NBA Finals, or the Superbowl.
My question is why is it the worst time to trade on major news events??? I thought the best times to trade was when the news comes out???
Extremely high spreads during newstime. Also the fact that you dont know what the news are going to be, so why should you trade something you dont know?
Other worst times I’ve found to trade:
When you’re bored. Stop.
When you’re too tired. Big mistakes happen at 2AM.
When you just lost a big trade. Stop. Turn your computer off and go to bed.
If your a news trader then that is the best time to trade and you will have a strategy for placing those types of trades. You will also have a very good understanding of what may happen with certain news events.
If not, then the news release can create a mini tornado in your trading, generally causing misery and occasionally taking your trade to the profit moon.
Usually placing a trade at the moment of a significant news release is a bad trading idea. Waiting until the market decides which way it wants to go and then trading has much less risk associated with it.
Higher spreads (as has been mentioned) and also slippage are other hazards.