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Futures Trade Desk- Times to Trade and Times to Look

Client Notes

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 11:00 ET through until 23:00 ET. It also reveals why the European Futures market open from 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%


Forward Momentum

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 ET (European close)

Bonds, equities, 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 going in the US from 07:00 ET. 

The 14:30 ET time-frame can provide activity as the NYMEX markets close, but in general anything placed at that time will not easily follow through, and will very likely drift aimlessly until swap interest is rolled over 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, on a day of exceptional global momentum.

16:00 ET through to 23:00 ET is a an absolute no-man's land of Futures movement, outside of sporadic reactions to Australian and Japanese red-flag economic releases which tend to quickly reverse. Many Futures trade books will be closed for new orders from 11:00 - 23:00 ET each day, with activity confined to adjusting existing positions and hedges rather than searching for new trades.


Weekend Trade

From 11:00 ET on a Friday most Futures 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. 

 



Information, analysis and methodologies provided are for informational purposes only, obtained from sources believed to be reliable, and should not be used as a replacement for research by an individual investor or licensed investment professional. In no event should the content of this correspondence be construed as an express or implied promise, guarantee, or implication that profits or losses can be made or limited in any manner whatsoever. No guarantee of any kind is implied or possible where projections of future conditions are attempted.