The Best (And The Worst) Times To Trade Futures

Because futures markets are open 24 hours a day, 5 days a week, there are plenty of opportunities to trade throughout the week. However, this does not mean that all hours are created equal. There are some hours where trading can be to your advantage as a larger volume of trades are taking place at those times. In this article, we share with you the best times to trade futures.

Understanding Trading Equity Index Futures

If you are trading equity index futures, you will already know that futures open for trade every Sunday at 6 PM, EST. With only an hour and fifteen-minute break each day, equity index futures are traded around the clock. In order to identify the best times to trade futures, we have to take a look at two trading sessions: the morning overlap and the afternoon period, just before going into the close.

Morning Overlap

At 9:30 AM EST, the American market opens for trading, and just three hours later at 11:30, the European markets close for trading. These three hours are known as the morning overlap and it is the most “liquid” session throughout the day. Because European traders have to close their position during this time, a high volume of trades can be expected, providing you with plenty of good opportunities to trade.

Keep in mind that this session can sometimes extend to 1 PM each day. When the market gets flooded with trades, you are surrounded by advantageous openings to start trading instead of sitting at your desk for hours waiting for opportunities.

Afternoon Session

Missed the morning overlap, or simply wish to come back for more? The afternoon session also presents traders with excellent trading opportunities. Around 2 PM is when the professional trading volume starts to go up again, as most traders return to their desks after lunch. Between 2 and 4 PM is when you can expect the most liquidity as traders start balancing their books for closing. Despite a high volume of trades occurring at this time, it can be tricky to navigate. Traders located in different time zones may wish to trade during the evening, where there are also some opportunities for movement.

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