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Futures Trade Desk- Times to Trade and Times to Look

Trade Desk Client Note

Global Futures Market Review

Times to Trade and Times to Look

The detail below shows the Bank for International Settlement numbers that analyze the global flow of forex and futures trade. It reveals the reason that momentum on any given day is weak from 10:00 ET until at least 19:00 ET. It also reveals why the European futures market openfrom around 02:00 ET through until the Chicago reversal at 07:00 ET are the main times to expect sustainable futures market moves.

U.K. and Euro-zone 52.6% (01:00 ET-11:00ET)
Asia 21.1%. (18:00 ET-03:00 ET) 
U.S. 16.6% (07:00 ET-16:00ET) 
Other Regions 9.7%

For maximum forward momentum futures traders will look to initiate new orders around the following times: 
23:00 ET (Tokyo PM session)
02:00-03:00 ET (European Open)
05:00-07:00 ET (U.S. futures reaction to London oil, gold, and Libor fixings)
11:00 EDT (European close)

Bonds, equities, futures, and commodities, are very active in the U.S. session. As a result forex values are pulled from pillar to post as major global markets wind down their trading day just as the largest commodity, bond and stock markets get go from 07:00 EDT. 

The 14:30 ET time-frame can provide activity as the NYMEX markets close, but most days anything placed at that time will not follow through, and will very likely drift aimlessly through until swap interest at 17:00 ET. If traders are looking to get involved in this period it should be done with reduced exposure and only if the S&P market is moving hard.

16:00 ET through to 20:00 ET is a an absolute no-man's land of forex and futures movement. Many futures trade books will be closed for new orders from 11:00 - 20:00 ET.

Weekend Trade
From 11:00 ET on a Friday most trade desks will not be actively looking for new positions, and will remain that way ahead of the European open at around 02:00 ET on Monday. Tenured futures traders do not want to get involved in the thin liquidity and volatile reversal times that Friday/Sunday trade can often bring.