In this post, we’ll focus on the best hours to trade. It is not the same to operate during the day as it is to operate at night, as it is to operate in the morning. So let’s look at the best hours to trade. But first, we recommend that you take note of the following concepts:

• Overnight Zone
• American schedule
• Opening of the American market

The first time zone we are going to talk about is overnight. This strip goes from twelve at night until three-thirty in the morning (in Europe, same with the time periods featured below). It is the period where the US has not yet opened the exchanges. It is an area that is characterized by having very little volume because during part of that time only Asia is open, and then during the last part Europe enters, but the volume does not significantly increase until they open in the US .

From three-thirty to ten is American time, it is when the North American market is operating; it is when there is more volume and it is when, as a scalper, you’d have more volatility and more volume to be able to trade. Then, from ten at night to twelve, we are back near to the overnight zone; therefore, far less volume. The characteristics of each zone are mainly the volume change.

There is a small-time slot in which you have to be very careful: the one that goes from approximately three-thirty until four when the American market opens. At this time the indices still have to position themselves and take direction. It is a time slot that lasts about half an hour and is characterized by extreme volatility. Trade there is very difficult. It is much better to let the fights finish – and once the market direction has stabilized we can operate with much more peace of mind.

Finally, when we talk about the best hours to trade, we must bear in mind that there are two-time changes per year. We change before them; therefore, during some times of the year in the US, they will open at two-thirty, an hour before the typical opening time. The hours we trade is important. If we work overnight and we have a little volume that means, there will be less volatility and for some traders that is good. As a scalper what I need is volatility. Therefore, if you want to scalp you must trade in the Regular Trading Hours, which is from three-thirty to ten at night. Remember if most traders had their hands down 50 percent of the time, they would win a lot of money.

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JORDI MARTÍ
Head of Studies of Canal Trader school