WHAT YOU NEED TO KNOW ABOUT TRADING FOREX ON FRIDAY for FX:EURUSD by DeGRAM (2024)

🔵 Friday is a relaxed day with the weekend ahead, followed by a working Monday. How does this affect the market? How do the big players behave on this day? Who holds positions over the weekend, taking risks? Today we will figure out what to keep in mind when trading Forex on Friday, why this day's candle is important, what tips can be extracted from the price direction on this day, and consider a few more important nuances that you are unlikely to think about.

▶️ The Friday news and the NonFarm.
Also, newbies should remember that Friday in America on the dollar there are often significant news releases, such as non-farms, which can really shake the market. So, on Friday, don't forget to check the economic calendar. Notice if there are any significant news marked with three red dashes on the calendar. So, there is no point in trading or following the market today. You can calmly leave it and go have a rest.

▶️The direction of the movement in the second half of the day is the key to the momentum on Monday.
The next thing you need to pay attention to is the movement in the second half of Friday and up to the market close. If the price is steadily moving up in that period, we should expect it to continue on Monday. Correspondingly, if the price is steadily going down, we can expect this impulse to go on at least during the first half of Monday. And we are interested in a clear and directed movement. Why it happens, I think, is clear: the big players are buying without fear that something will happen over the weekend. In other words, they are confident in the absence of news, they confidently buy or confidently sell and this means that on Monday we can expect the momentum to continue.

▶️ Weekly candlestick formation
In general, the market does not like to change the shape of the weekly candlestick on Friday. Therefore, looking at the chart on the W1 timeframe, and looking at the practically formed weekly candlestick, we can assume what the movement will be at the end of the day. For example, this Friday, at noon on the EURUSD chart, the weekly candlestick has a rather long tail, which indicates that the bulls have already been taken out. Plus, a pretty deliberate downward price move. Even if you take into account the non-farms, often they only take out the stops and then the price recovers in just a couple of hours. So, most likely, the downside movement will continue till the end of the day or the price will stay at the same level. But we should not expect any appreciable rise.

Or the weekly candlestick by 12:00-14:00 GMT on Friday is full-body bullish, or full-body (large body, small shadows) bearish, you should not expect a significant price movement in the opposite direction till the end of the day. Accordingly, in this case, if you trade within the day, it makes no sense to look for sell trades, if the weekly candlestick is obviously bullish.
Of course, if the weekly candlestick is indistinct, for example something like a doji, the price may go in any direction, and it is difficult to predict anything reliable by such a candlestick. But a solid weekly candlestick allows to rather accurately predict the market behavior on Friday afternoon: a bearish one is down, and a bullish one is up. Or almost no change, which happens more often than we'd like.

▶️ Why is Friday so significant?
A huge amount of forex trading is intraday trading. High-frequency and intraday traders account for up to 80% of transactions in the market. And they all get out of the market before Monday.
So, who are they those people who open positions on Friday and leave them for the weekend? After all, anything can happen over the weekend. They are the big traders, various serious institutions who have more information than us or the media. At the same time, they agree to the risk of transferring trades through the weekend, they pay swaps. That is, these are very significant traders and the direction of their positions is worth watching, at the very least. Therefore, what happens on Friday often has a significant impact on the further price movement, and can give an impulse for Monday and the whole next week.

In addition, according to statistics, Friday is often the minimum or maximum point of the weekly candle. For this reason, we should expect the continuation of the directional movement of the price, if it is present in the weekly candlestick. If you take a single Friday candlestick of D1, in the case if it has any of the signals by your trading system, or by Price Action in general, it is worth paying close attention to it.

▶️ When to open a position with a signal on D1, on Friday or Monday?
When it is better to open a position in the presence of a signal on D1 at market closing on Friday evening or at market opening on Monday? The answer is simple: we open positions at market opening on Monday. If there is a gap, we trade it, and if there is no gap, we trade our set-up. Because if you open a position on Friday night, a huge gap can simply take your stops out on Monday and you will make a loss (plus your order may slip). Therefore, if you see any signal on Friday night, you better open positions on Monday.

✅ Conclusion.
In addition to the above, we should not forget that many traders close trades and fix profits on Fridays, not wanting to roll over positions through the weekend. This can be due to a possible gap, as well as with the desire to exit the position and quietly go to the weekend. So at the very end of the day if there was a clear bullish trend, price rolls back a bit (bulls fix profit), if there was clearly a bearish trend - price moves a bit higher (bears close positions).