Jut thinking about the Aug.2015 moves and of the S&P500 and USD/JPY moves last Friday made me revisit some of the old tales promoted in market circles, such as:
- never trade on Monday or Friday;
- ‘sell in May and go away’;
- August is too quiet to trade.
Here are two articles that explore some of the problems with these ideas:
There are also implications, not all positive, in trying to time the market in terms of months of the year, such as explained in this recent article:
Personally, I believe that ‘the market’ is such a huge collective of people that if irrationality (e.g. panic) hits it in an extreme way, it will not wait for a conveniently agreed ‘better time’ to make its move… Just like people who think that houses are better bought in the summer, and in so thinking will miss great winter deals…
The market may be quieter at times, historically/on average during certain times of the year or the week, but, in truth, we (the retail traders) should not base our trading decisions on these notions: next time you miss a great trade on a Friday afternoon after the NFP data, or in August, do not blame the market tales told by so many but, rather, blame yourself for believing them.