Is the Festive Season a A Good Time to Trade?
If you celebrate Christmas but you are also interested in forex trading, then you will probably thinking if it is good time to trade or not. In fact, holiday periods aren’t good for Forex traders as many people take time off. This makes the forex market less liquid and as a result low liquidity is not a really desirable market conditions whereas high liquidity increases your chances of making big profits. When Forex traders are not placing as many order as they normally do, the Forex markets losses liquidity and currency markets prices tend to go flat.
The Impact of Holidays on Trading Assets
The holiday related volatility is unbiased. There might be an uptrend or downtrends can occur. Therefore, it is important to choose a strategy based on low or high volatility index.Trading during the festive seasons is best if you have nerves of steel.
Some positive aspects are:
– Strong profit taking increases volatility and can be used to your advantage. Make sure you are on the right side of the market at the right time. Day trader trends emerge in the first few hours of a session. Again, being in the right place at the right time can work in your favor.
– Risky assets, e.g stocks and some commodities, introduce fluctuations in risk appetite and risk aversion and present potential opportunities. Look for favorable moves in correlations between markets.
Should I trade during the Festive Season?
It is preferable to take some time off to either rest or study during the Christmas and New Year period because the forex market conditions are not good for forex traders. However, if you don’t celebrate Christmas or do but you would like to be productive without testing the poor market conditions, you could always take some time to study and return when the markets are back to normal and your are feeling fresh and possible with new information that you didn’t have before the holidays season.
