Forex And Christmas Trading

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Whatever your religion or beliefs, there is no doubt that once again the Christmas or Holiday Season is upon us.

In the world of commerce and advertising, we start to hear about super Christmas offers from the end of September with a heightened awareness of the need to BUY – BUY – BUY right up until the eve of Christmas day.

Then immediately after Christmas, it is all BUY – BUY – BUY again as the seasonal sales in most major stores begin

However in the forex trading world, business is somewhat the exact opposite! September, October and November are historically busy months for trading with high volume, but once we get into December we need to watch out!

From the middle of December onwards we enter the slow season. With many institutes closing trading early for Christmas festivities, we have to accept that the financial investing world does not necessarily have its eye firmly on the markets. Volume dramatically recedes and the markets usually become a great deal more volatile.

Even with the best forex trading strategy it is all too easy to get caught out by suddenly reduced volume with increased volatility.

Successful individual retail traders like you and me will take this time of the year as their special family holiday time and many will not be at their residential abode during the holiday season and until well into the New Year.

Due to all this frivolity, the volume of trades being made from the 15th December until the 7th January will be extremely low and the unsuspecting newbie trader can find themselves being whipsawed viciously during these three weeks of holidays, due to nothing more than a lack of participation from the part of the big financial institutional traders and a percentage of individual traders.

During this time, new traders will find that forex trading systems which were working fine for them before the holiday period began will suddenly not work very well at all and like a dripping tap their trading capital will slowly start to leak away.

Add to this mix the possibility of a serious geo-political event, terrorism attack, change of political leader or some other significant event during the holiday period and you may suddenly find your trades going very pear shaped indeed. Certainly you may have been better employed by getting more into the holiday mood, be that sipping mulled wine and eating mince pies or whatever holiday tradition you personally prefer.

Trading is a discipline. Patience is one of the stock in trade requisites that all traders must have or develop – Likewise emotional and self control. If you find that you are tempted to trade during this very challenging period, either use these afore mentioned attributes to curb the desire, or if you really cannot stay away from the markets for even a few days, then use this time to demo trade only.

So traders beware, you have been warned. Try to stay away from the trading platforms during the Christmas Holiday season and enjoy some quality family time.

A Very Merry Christmas or Holiday Period to you all.

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Posted by NYBroker   @   21 December 2009 0 comments
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