If you are new to investing, you may think that certain days of the week are better for buying and selling than others.
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According to Advanced Trading Analytical Software (ATAS), Mondays are generally days to avoid as trading is relatively inactive compared to other days of the week. ATAS further explains that liquidity tends to be lower on Fridays, making it unwise to take risks just before the weekend to avoid a bad wake-up call the following Monday. In this sense, Friday is worse for trading than Monday. There is also some context to consider when trading. Novice traders are advised to avoid trading around important market news such as interest rates and non-farm payrolls (NFP).
not everyone agrees
It’s worth noting that not everyone is advocating putting as much “stock” into the concept of a day-of-the-week investing strategy, as Chase notes. Instead, we recommend that you consult a financial advisor. The argument against this strategy is based on the lack of long-term evidence supporting particularly volatile days. There are several factors that can be unpredictable no matter what day of the week, such as world events, holidays, and economic uncertainty. The fact that asking different sources yields inconsistent advice suggests avoiding this strategy altogether. Some people believe in the Monday effect (the tendency for stock markets to fall on Mondays), but this contradicts ATAS advice. Conversely, Benzinga says that effect has disappeared over the past decade, which speaks to the market’s inconsistency and unpredictability.
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Benzinga argues that your day-of-the-week strategy should: do not have It supersedes any individual market analysis or company research. They argue that suggestions about what days to trade should be taken as generalizations rather than requiring strict compliance. After all, if a particular trend is accepted by the masses, its effectiveness will be diminished by exploitation.
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This article originally appeared on GOBankingRates.com: Don’t buy or sell investments on this day of the week
