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If you trade forex you probably know one of the best advantages is the decentralization of it. While other trading markets close for holidays around the globe, the forex market is going to work no matter what. For instance, Spring Bank Holiday in the United Kingdom and Memorial Day in the United States pushes all markets to temporarily put trading on hold. However, the Forex market is not a case here.
While other countries pause their trading through holidays a decentralized market avoids this restriction. The forex market works for 24 hours five days per week the whole year. The only exception is the weekend. We all need to rest sometimes. Of course, such a unique quality of the forex market brings not only advantages but also disadvantages for its traders. Remember to weight all your decisions before opting for such kind of trading.
How you can advantage with the forex market while countries are on holiday?
In a time when the market faces volatility due to the absence of volume, when experts publish economic reports, you have a great opportunity on the forex market that you should not miss out on. If you are one of those traders who do not need a lot of movement on the market, you could use these conditions to enter much larger volumes while having orders with short stop loss. This way you can enhance your possible trading return.
What are the risks of forex trading through holidays?
When traders go on holidays and the forex market continues to work, this situation is going to cause a certain fall in volume. Then it leads to messy moves, especially after traders see that the main report is published. Not all traders know that these moves during holidays should not be ignored as much as possible. Mainly, they can be called off after the holidays finish. Moreover, action moves that are related to price are not so relevant as they seem.
What are the best tips for successful trading during the holidays?
During holidays all action on the market is located around the economic reports from countries where the forex market is open. Thus, you should look for opportunities while volume and volatility are growing. As a rule, for the rest of the holiday session, exactly reports will impact the most on forex trading and their currency pair. Such influence provides positive results. Thus, we have for you the top 6 recommendations for successful trading during holidays.
Take into consideration the seasonal trend
Years of analytics and reports show that there is such a notion as a seasonal tendency. It shows a drop in currencies for one year and rising during another one. Among great examples is the “year-end” effect that is characterized by the weakening of the US dollar in the last days of the year and following the strengthening of it during the first months of the next year. The main reasons for such behavior are certain deadlines for reporting and tax assessment. Moreover, the main positions are closed at the end of November and opened once more at the beginning of the year. Thus, remember these things while you are going to trade during the holidays.
Retune your take-profits and stop-losses
As a rule, the volatility of markets is not present during the holidays. Thus, it will be better for you to retune the sizes for stop-losses and take-profits. For instance, instead of putting take-profit 100 pips from your regular entry point, now you should opt from 70 to 80 pips. It is much safer for your forex trading.
Scalp if given the chance
It is clear that during holidays fewer people work with trading and more will try to take a rest. Thus, the level of liquidity goes lower than under ordinary conditions. Big currency pairs tend towards existing in narrow ranges during holidays. Thus, try developing scalping strategies and tracking the spreads. While conducting tech analysis, try to concentrate on finding resistance and support levels. Also, take into consideration methods of range trading that can be quite helpful.
Check on the calendar
There are two days at the end of the year when there is no trading. However, you still have many opportunities to open successful trades. You can learn more about the working periods of the forex market and FBS forex broker in the section “company news” of the chosen website. Take into consideration the fact that this calendar has only a few important events but still the situation shows that even small movement can change the situation on the market. Thus, do not be swayed by a calm situation on the market during holidays. The smallest change may cause a sudden rise in prices.
Watch out for yourself and be vigilant
Never forget about possible risk management. For instance, a stop-loss order can save you from negative development. Along with that, you have to gain profit on irregular spikes during volatility, check on news and make use of application MetaTrader and its main features.
Choose small time frames
Remember to use a low level of volatility. During this period you can find various opportunities for trading using only small time frames. For instance, you can opt for charts with 30 min or 15 min time frames. If you are still trying to trade on bigger time frames this will not help you gain good profit. Usually, on holidays the forex market does not have a lot of liquidity to provide a certain move in a long period of time. Moreover, economic events during holidays are quite a rare occurrence than you may think.
Of course, trading on the forex market during holidays is not for everyone. You should take into consideration all the moments and goals in your trading strategy so that you can earn more profit. If you still have decided that this type of trading for you do not forget to use mentioned above recommendations that will help you build successful trading sessions.
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