Trading at the end of the year?

Beginner Questions
1

Hi there,
I have been reading a few articles online and came across one which made the statement that trading at the end of the year is not a very good idea since there are much less market movements because most traders at large banks are on their holiday and banks will generally trade mostly to balance their books. Im not sure if im allowed to post links to other websites on here but its also a forex noob site that I came across this information. Is the information true?
Thanks.

2

[QUOTE=“lethalr53;674203”]Hi there,
I have been reading a few articles online and came across one which made the statement that trading at the end of the year is not a very good idea since there are much less market movements because most traders at large banks are on their holiday and banks will generally trade mostly to balance their books. Im not sure if im allowed to post links to other websites on here but its also a forex noob site that I came across this information. Is the information true?
Thanks.[/QUOTE]

Yeh it is generally true that the forex market volatility drops and begins behaving “odd” during the last two weeks of December due to the reasons you stated. Money can still be made, but only if you are cognizant that you are trading in the context of a unique market condition (holiday season) and are familiar with its characteristics.

3

Everybody needs a holiday. Doesnt matter who you are or what you do. Everyone needs a break. If its good enough for the institutions then its good enough for me.

4

It’s not that it can’t be done or shouldn’t be done, there’s just not much movement happening. Forex works well when there is good movement so it’s better in January after the new year.

5

I agree! I use the last two weeks of the year in order to review my trades and see where I can improve in the following year. I think a forex trader can always fine tune and given the lack of volume during the holiday season and absence of traders I think it is the best time.

6

This is actually a good time to put on larger positions because closer stops can be used. Check out the way Richard Dennis and the turtles used ATR to measure volatility and increase position sizes under circumstances of low volatility. Check this.

7

yeah, i avoid doing much trading during end year holidays and just go through some journals and back track my trading for 2014, ill give it another ten days in january till things settle down.