Holiday Trading (End of Year)
A belated Happy New Year and Merry Christmas! (to whomever that applies). I hope you all spent some time with loved ones and re-centered yourselves in preparation for the new year that will come with new heights ergo new challenges (I hope you can tell I’m practicing the use of that word lol)
Since I stopped trading on the 18th of December 2020, after the New York session close, the markets have continued to move… like MOVE. I had a little bit of FOMO, I can’t lie, but I thought I should watch and observe for the next two weeks. Should people trade over the holidays? I think my answer has changed a little…
Holiday For WHO?? (Not the "health" people)
Notice I decided to stop trading on the 18th of December (Week BEFORE Christmas) and anticipated that overall trading volume would dip heavily on the week of Christmas. I was (sadly) mistaken.
Do you know how generous the market was this festive season? There were countless 50-100 pip moves there for the taking.
As I write this article, I’ve just finished backtesting those two weeks (Week of Christmas & Week of New Year), and they would’ve been part of my most profitable weeks in 2020.
Most of these gains “would’ve” come during the week of Christmas. There was just no stopping the market this festive season.
This tells you that the banks only stopped moving money ON the day of Christmas, and I doubt it’ll take them long to get started again in the new year.
If you look at the 52 weeks of 2020. The Forex market is open 24/5 for ALL of those weeks except holidays and certain days when brokers don’t execute trades, but you’re able to trade the whole year round for the most part.
So the question is, why not? I would’ve made a significant profit. Why not trade? Now, you’ll get different answers from different people, all with different opinions.
Let us look at it from a RISK standpoint. If you decide to trade on weeks like this, your money is at risk 24/5 for 52 weeks. You have to be mentally on point for 52 weeks without faulting.
If you can do that, there is nothing wrong with continually participating in the market. If you can find time to bring yourself to the charts and mentally withstand the minor drawdowns throughout the week while operating at your peak, then it’s a good idea.
If your strategy depends on normal trading conditions and you feel a bit mentally fatigued at the end of the year, then the best choice is to keep your money out of the markets for a week or two before you go at it again FULL THROTTLE.
Holiday for You?
Whether you decide to take a break or not depends on you and your strategy. The market will move during the festive season.
Can you still be on the ball at the end of a long year? If not, you increase the risk of losing your money. Does your strategy make money most weeks? If not, the risk of losing any money during this period won’t be worth it.
But that doesn’t mean that there’s no money to be made during the “forbidden” weeks of Christmas and New Years’. Entirely up to you whether you take advantage or not.
Don’t bet the farm.
Don’t lose your Shirt.
Cut the L.
Keep the W.
Belated happy New Year and Merry Christmas