Hey everyone) The new year is coming and a lot of big guys like banks and financial institutions are going to take a break so we can expect a low volatility in the last week of December and the first week of January.My broker is just going to take two holidays (25th of December and 1st of January) .Is it safe to open new trading positions during this low volatility period? Please tell me according to your past experience of trading during this time period.
Thanks
Secure Trading
Yes, volatility does typically drop at this time of year, for the reason you mentioned. Markets will typically tighten which can be seen by a reduced ATR when looking historically at this time of year. However, you can still trade should you feel you want to dip your toes into the market, just keep in mind that stops and targets ‘may’ need to be tightened. On the other side of the coin, less traders in the market can mean more volatility as is can take less to actually move the market due to the reduced number of players.
Personally I stay out at this time of year, the last two weeks of December and the first two weeks of January. If you want to trade then perhaps only look for premium valid set-ups, giving the valid sub-prime set-ups a miss for now.
Thanks for your quick reply mate) But i can,t understand how less traders in the market mean,s more volatility? I never heard that before.
[QUOTE=“marketdeal;577204”] Thanks for your quick reply mate) But i can,t understand how less traders in the market mean,s more volatility? I never heard that before.[/QUOTE]
He basically explained it in his post. Less volume allows a big player to be able to strongly impact the market… When in normal conditions the impact would be minimal.
Got it but that,s good for some big player and not favourable for small guys like us,we always need to follow the big guys and be on the right side of the market.