Traders active in North American and European markets are the most likely to place their trades in the first hour of the trading day, with 34% of their trades executed during this time, according to the survey results.
The first hour of the trading day is the most favored time to execute trades globally, across all asset classes, with this preference being true for traders dealing in equities, commodities, foreign exchange (FX), and bonds, the Trading Timings Insights Report showed.
Meanwhile, the period after lunch but before the last hour of the trading day is the least preferred time for trades among all asset classes, with only 16% of traders selecting this timeframe.
FOREX.com conducted a uStats.org survey which surveyed 3,000 traders globally between 3rd-10th July 2023.
The experts analyzed global trading patterns combined with survey insights collected from experienced traders, to uncover the most popular and opportune times for executing trades.
Long-term traders, whose preferred trading timeframe spans weeks to months, are more inclined to execute trades during the first hour of the trading day. This aligns with the broader global trend, where most traders, irrespective of the asset class traded, favour the initial hour for trade execution.
Michael Boutros, Senior Technical Strategist at FOREX.com, said: “Aside from the daily timing patterns, traders should also consider seasonal trends. For example, the holiday season might see reduced trading volumes and increased market volatility, presenting unique opportunities for risk-aware traders. Additionally, geopolitical events and economic indicators can create fluctuations in global markets, demanding cautious and strategic decision-making.”
Experience also appears to influence the timing of trades significantly, according to the survey.
Traders with over 10 years of experience are most likely to trade in the first hour of the day, while those with 5 to 10 years of experience display a preference for the last hour of the trading day, with a notable aversion to trading after lunch but before the final hour.
Examining various asset classes, FX traders were found to have an inclination towards the first hour of the trading day with 38% prefer this time for executing most of their trades.
Additionally, FX traders are least likely to trade after lunch but before the last hour, suggesting a focus on early opportunities.
“Diversification remains a cornerstone of successful trading. By spreading investments across various asset classes and geographies, traders can mitigate risks associated with market fluctuations. It also provides the flexibility to adapt to different time zones and take advantage of favourable trading hours in diverse regions,” commented Boutros.
