• Thu. Feb 22nd, 2024

Survey Finds When Traders Are Most Active. It Has Nothing To Do With The Markets

Time is
money. Timing is also really crucial in trading, both in terms of the moment of
entering and exiting a position and the time of day when the transaction is
opened. The recent survey by FOREX.com sheds light on when traders prefer to
make their moves. It uncovers patterns in trading preferences across various
asset classes and experience levels, showing that traders are most likely to
choose the first or last hour of the trading day.

According
to the survey, 35% of traders prefer the first hour of the trading day for
executing trades. This is closely followed by 30% who favor the last hour. The
least popular time is after lunch but before the last hour, with only 16% of
traders opting for this period.

In the Asia
and Pacific (APAC) region, 37% of traders prefer the first hour, while 34% opt
for the last hour of the trading day in Europe. North America shows a balanced
preference, with 34% favoring the first hour and 32% the last hour.

Long-term
traders, who hold positions for weeks to months, are more inclined to trade
during the first hour, aligning with the global trend. In contrast, traders
with five to ten years of experience prefer the last hour.

Forex
traders stand out for their strong inclination towards the first hour, with 38%
preferring this time for most of their trades. In the case of other asset
classes, the results are more balanced. However, the survey shows a general
trend that, regardless of experience, type of assets, and region, traders
prefer to trade at the beginning and end of the day, with the least activity during
its course.

“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,” Michael
Boutros, the Senior Technical Strategist at FOREX.com, commented. “Additionally,
geopolitical events and economic indicators can create fluctuations in global
markets, demanding cautious and strategic decision-making.”

This type of data can be extremely important for brokers and FX/CFD service providers. By knowing the hours during which their clients trade most frequently, they can send them notifications about interesting trading opportunities, thereby increasing overall trading activity and retention.

These results
are based on a survey conducted by FOREX.com, which surveyed 3,000 traders
globally between 3-10 July 2023.

A separate study prepared by Capital.com in June showed that time also matters for the
profitability of transactions in terms of their duration. Capital.com revealed
that holding different types of assets for longer periods could lead to
increased earnings. The research found a significant correlation between the
length of time a trading position is held open and the likelihood of making a
profit.

Specifically, traders who kept their positions open from 30 minutes to
six hours had a higher chance of making a profit, with an average rate of 44%.
Additionally, these traders were more likely to use stop-loss mechanisms.

Traders Want Extended
Session Hours

Although
the FX market is available 24 hours a day, the ability to trade in the stock
market is limited to the duration of the session. However, an increasing number
of companies offering trading to retailers want to change this, expanding day
trading opportunities with new instruments.

Last month,
Interactive Brokers broadened its after-hours trading options to encompass
10,000 US-listed stocks and ETFs. This move allows clients to trade nearly
round-the-clock, five days a week.

Similarly,
eToro extended its daily trading hours by three additional hours for a unique
set of CFD stocks in July. The company stated that the extra time would enable
clients to respond to events that occur outside regular trading hours, such as
earning announcements or major economic news.

Aiming to
cater to a rising demographic of young time-flexible investors, Robinhood also
offered 24/5 trading for individual stocks in the US. The well-known trading
platform launched its Robinhood 24 Hour Market service in May, which, after a
testing phase, is now accessible to all its users.

“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 favorable trading hours in diverse
regions,” Boutros added.

Spectrum
Markets’ H1 2023 report further disclosed that 35.3% of individual trades took
place outside standard trading hours. The company highlighted that traders were
most active in indices, making up 79.2% of the activity. The leading
instruments in this category were the DAX 40, accounting for 25.3%, followed by
the S&P 500 at 20.8%, and the NASDAQ 100 at 18.8%.

Time is
money. Timing is also really crucial in trading, both in terms of the moment of
entering and exiting a position and the time of day when the transaction is
opened. The recent survey by FOREX.com sheds light on when traders prefer to
make their moves. It uncovers patterns in trading preferences across various
asset classes and experience levels, showing that traders are most likely to
choose the first or last hour of the trading day.

According
to the survey, 35% of traders prefer the first hour of the trading day for
executing trades. This is closely followed by 30% who favor the last hour. The
least popular time is after lunch but before the last hour, with only 16% of
traders opting for this period.

In the Asia
and Pacific (APAC) region, 37% of traders prefer the first hour, while 34% opt
for the last hour of the trading day in Europe. North America shows a balanced
preference, with 34% favoring the first hour and 32% the last hour.

Long-term
traders, who hold positions for weeks to months, are more inclined to trade
during the first hour, aligning with the global trend. In contrast, traders
with five to ten years of experience prefer the last hour.

Forex
traders stand out for their strong inclination towards the first hour, with 38%
preferring this time for most of their trades. In the case of other asset
classes, the results are more balanced. However, the survey shows a general
trend that, regardless of experience, type of assets, and region, traders
prefer to trade at the beginning and end of the day, with the least activity during
its course.

“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,” Michael
Boutros, the Senior Technical Strategist at FOREX.com, commented. “Additionally,
geopolitical events and economic indicators can create fluctuations in global
markets, demanding cautious and strategic decision-making.”

This type of data can be extremely important for brokers and FX/CFD service providers. By knowing the hours during which their clients trade most frequently, they can send them notifications about interesting trading opportunities, thereby increasing overall trading activity and retention.

These results
are based on a survey conducted by FOREX.com, which surveyed 3,000 traders
globally between 3-10 July 2023.

A separate study prepared by Capital.com in June showed that time also matters for the
profitability of transactions in terms of their duration. Capital.com revealed
that holding different types of assets for longer periods could lead to
increased earnings. The research found a significant correlation between the
length of time a trading position is held open and the likelihood of making a
profit.

Specifically, traders who kept their positions open from 30 minutes to
six hours had a higher chance of making a profit, with an average rate of 44%.
Additionally, these traders were more likely to use stop-loss mechanisms.

Traders Want Extended
Session Hours

Although
the FX market is available 24 hours a day, the ability to trade in the stock
market is limited to the duration of the session. However, an increasing number
of companies offering trading to retailers want to change this, expanding day
trading opportunities with new instruments.

Last month,
Interactive Brokers broadened its after-hours trading options to encompass
10,000 US-listed stocks and ETFs. This move allows clients to trade nearly
round-the-clock, five days a week.

Similarly,
eToro extended its daily trading hours by three additional hours for a unique
set of CFD stocks in July. The company stated that the extra time would enable
clients to respond to events that occur outside regular trading hours, such as
earning announcements or major economic news.

Aiming to
cater to a rising demographic of young time-flexible investors, Robinhood also
offered 24/5 trading for individual stocks in the US. The well-known trading
platform launched its Robinhood 24 Hour Market service in May, which, after a
testing phase, is now accessible to all its users.

“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 favorable trading hours in diverse
regions,” Boutros added.

Spectrum
Markets’ H1 2023 report further disclosed that 35.3% of individual trades took
place outside standard trading hours. The company highlighted that traders were
most active in indices, making up 79.2% of the activity. The leading
instruments in this category were the DAX 40, accounting for 25.3%, followed by
the S&P 500 at 20.8%, and the NASDAQ 100 at 18.8%.


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