Trading CFDs (Contracts for Difference) can be highly profitable if done right. CFDs provide traders with the opportunity to make profits by trading on the price movements of financial instruments like Forex, stocks, indices, and commodities. However, to reap the most from trading CFDs, traders must be aware of the best times to trade. In this post, we will be discussing the best times to CFD trading.
The best time to trade Forex CFDs is when the markets are most active. The most active time for the Forex market is during the London-New York trading session overlap. During this time, the markets are busy, and liquidity is high, which makes it easy to make large trades. The London-New York trading session overlap is usually from 1 pm to 5 pm GMT.
Stock CFD trading overlaps with the trading hours of the underlying stock exchange. Therefore, traders should know the local trading hours of the stock exchange they wish to trade. In addition, traders should also take note of the earnings reports and financial news of the underlying companies they are trading.
The best time to trade commodity CFDs is during the US trading session. During the US trading session, commodity prices typically experience higher volatility, which provides traders with more trading opportunities. Traders should also watch out for the release of fundamental news that could move the market in their favour.
Index CFDs are traded as long as the underlying stock exchange is open. Since the stock exchanges all trade during different hours, the best time to trade index CFDs depends on the index being traded. For example, the S&P 500 index CFD can be traded from 1:30 pm to 8:00 pm GMT.
Time of Day
Apart from market hours, the time of day also plays an important role in CFD trading. For example, the early morning Asian session is relatively quiet and has low volatility. In contrast, the late Asian and early European sessions experience high volatility, which can provide trading opportunities.
In conclusion, knowing the best times to cfd trading is essential for traders who wish to make the most out of their trading. The best times to trade CFDs are when the markets are most active, and traders should also pay attention to fundamental news and earnings reports that could move the market in their favour. With this knowledge, traders can get better at timing their trades, leading to a more successful trading experience.