Eurodollar best time to trade?

Hello,

I consider to start trade Eurodollar (now trade Dax) and I wonder if there are any experienced Eurodollar traders that can tell me when is the best time to trade this instrument ? ( I am located in London and thus GMT applies).

Are there special times one should avoid trading the Eurodollar? For example, Dax is most of the time not worth trading between 10.30 and 13.30 and after 17.00 due to liquidity and general dullness at these times. Do Eurodollar inhibit dullness and shrinkage of volatility at reoccurring times of the day, if so when?

Any help would be greatly appreciated.

Flytrade

It sounds like you are considering day trading Eurodollars. If so, I have to ask why? Eurodollars tend to have relatively narrow daily trading ranges and are not overly conducive to that timeframe. I used to have to write daily commentary on Eurodollars, which was a challenge on most days. The exception, of course, is data release situations which certainly can see considerable volatility.

They do have some very strong longer-term trends, though.

rhody - volatility can be a bad thing or a good thing. most pro's tend to trade low volatility products, not high volatility, as pro's look at risk first.

fly - eurodollars on cme globex or liffe connect?

dont know about liffe, but on cme (where the volume is) try 13.20 - 17.00 BST (british summer time as we are now on!!) ie 7.20 - 11.00 am CST. the product trades 23 hors a day, but these are the main hours of liquidity across all money market, interest rate and fx products in the usa.

eurodollars also trade in simex but i have no idea about liquidity there, but they are fungible with the merc ones.

charliechan said:

rhody - volatility can be a bad thing or a good thing. most pro's tend to trade low volatility products, not high volatility, as pro's look at risk first.

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I would tend to disagree on the pro picking low volatility products. Consider the US T-Bond contract for example - prone toward high volatility, especially on data release days, but traded by a great many professionals.

That's all an aside, though. I was not speaking of volatility in the negative connotation often associated with the term, but rather in terms of raw price movement - daily ranges. On most days the Eurodollar contract has a range of only a couple ticks. A 4-5 tick range is a volatile day.

Eurodollar futures on CME

I was thinking Eurodollars on CME, had a look at 5 min chart and it seems that Eurodollars have quite a lot of wide range bars ie more than 10 ticks so once onboard one of those it should work itself out but time and experiment will tell me if this is the contract for me.

flytrade said:

I was thinking Eurodollars on CME, had a look at 5 min chart and it seems that Eurodollars have quite a lot of wide range bars ie more than 10 ticks so once onboard one of those it should work itself out but time and experiment will tell me if this is the contract for me.

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I think we have a miscommunication here. "Eurodollars" are fixed income/money market instruments based on the LIBOR rate. You seem to be referring to EuroFX, which in the spot forex market would be EUR/USD. Totally different animal all together! That you can certainly day trade. You'll get mixed views on whether it's best to trade futures or spot.

Euro FX EUR/USD futures on CME

Yes you are right it is Euro FX EUR/USD futures on CME on that I meant, the best times do trade this at looking at the charts seems to be between 13.20-17.00 Brittish time.

the times depend on the exchange you are using,

if you are looking at CME, that US trading times apply