Summer liquidity: cutting the Friday afternoon window

[LondonScalper]

Every summer I cut the Friday afternoon window, and every summer I am tempted to undo it.

The rule is simple: from June until the end of August, my Friday EURUSD trading ends at 12:00 London. If Asia was dull and lunch spreads are already drifting wider, I stop earlier. I do not wait for the US open hoping for movement.

The reason is in my journal. Summer Friday afternoons had the worst ratio of scratches to clean trades of any slot in the week. Lots of small losses, barely any follow-through, and too many trades taken purely out of boredom. Once I removed them, my summer weeks became flatter but noticeably less frustrating.

The important bit is that the cut is written on the sheet from the first of June, not decided at 14:30 when I am already bored. If I decide in the moment, I always find a reason to take one more trade.

What I do with the free time: the weekly review, a look at the deals tab, then I leave the desk. A shorter week in July is not a lost week. It is a cheaper one.

[Shadow Trader]

LondonScalper, putting the cut in writing on the first of June is the part most people skip. I did the same thing for two summers but decided it each Friday morning, and the result was that I traded the afternoon roughly every other week.

My numbers looked similar to yours once I split them out. Summer Friday trades after 13:00 London were about 40 percent scratches against 25 percent for the rest of the week, and average R was slightly negative after costs.

One edge case I would think about is the payrolls Friday in early June, July and August. The afternoon there is anything but dull, so do you keep the 12:00 stop on those days or treat them as a separate rule?

I also found the last two weeks of August were the thinnest of all. Spreads on EURUSD at 15:00 were often double the morning level, which made the decision easy.

The weekly review on a Friday afternoon is a good use of the time. I do mine with the deals tab open and flag every trade taken after the cut time, if any slipped through.