Why You Should Avoid Trading Over Christmas And The New Year

At this time of the year many traders tend to take an extended break from forex trading, and the reason why is because it is very hard to generate profits over the Christmas and New Year holiday season.

I myself have been trading the currency markets for a number of years now, and always make sure that I stop trading at least a week before Christmas because I know that it always becomes harder to make money during this time.

I will usually resume trading well into the New Year when all of the traders are back at their desks and everything is back to normal.

The main reason why I and many other forex traders take a break is because the markets are a lot quieter over the Christmas and New Year holiday period.

Volumes tend to drop off quite considerably and price moves amongst the major currency pairs are often small and contained on a daily basis. You can sit staring at your screens for hours on end, but the price will barely move a lot of the time.

There are also be other occasions when you get large price swings that are almost impossible to foresee because they are influenced by the lighter trading volumes.

Generally, though, you will find that the markets are really quiet most of the time. If you need evidence of this, you only need to record the daily price movements of all the major currency pairs during this time, or look at the Average True Range indicator over the course of the holiday period, when you should notice that they all become a lot less volatile.

If you do insist on trading over the holiday season, you should maybe consider reducing your stakes or reducing your price targets due to the smaller price moves.

Alternatively if you are more of a long-term trader and are not really concerned about the small intraday price moves, then you may want to consider trading as normal.

However I personally would suggest that you take a break altogether and enjoy the holiday season without worrying about the markets because, in general, volumes and volatility are greatly reduced and the price moves are often a lot more unpredictable.

You have the rest of the year to make decent returns from the forex markets because they will always be available for you to trade. So why risk losing money and stressing yourself out during what should be one of the most enjoyable times of the year?