5 Tips for Holiday Trading

Tip #1 – Take seasonal trends into account

If you already have some experience in trading, you have probably noticed how currencies tend to fall during one period of time and rise during another – what we know as a “seasonal tendency”. In particular, the so-called “year-end” effect is that the USD tends to weaken in the final days of each year, but then starts recovering in January or February. This happens because of deadlines for taxation and reporting. In addition, many positions are closed before the end of December and reopened at the beginning of January. Take these things into account while planning your trades and be careful with your money.

Tip #2 – Readjust stop-losses and take-profits

Normally volatility subsides during the holiday period. You may need to readjust the sizes of your standard stop-losses and take-profits.

Tip #3 – Scalp if possible

The market gets less crowded as many people decide to take a break and celebrate. The amount of liquidity is lower than usual. As a result, major pairs tend to spend the majority of time in narrow ranges. In such an environment, it makes sense to consider scalping strategies – don’t forget to check spreads, though. In technical analysis, focus on locating support and resistance levels. Range trading techniques may also come in handy.

Tip #4 – Check the calendar

Although there’s no trading on December 26 and January 1, other days will offer you lots of opportunities to open great trades. You can find more about the business hours of the market and FBS in the “company news” section of the website. Notice that although the holiday economic calendar contains only a few important events, even a small piece of news may move a thinned-out market. Even though most of the time holiday markets resemble a calm sea, the situation may change in no time, resulting in big price spikes.

Tip #5 – Protect yourself and stay alert

Remember risk management: stop-loss orders, for example, will protect you from an unfavorable turn of events. At the same time, be ready to earn on occasional spikes in volatility, monitor newsfeeds, and use the FBS app to keep an eye on the key instruments.

Summary