LeTechs Forex Blog - Why the worst time to trade Forex in December

23 Dec

Why the worst time to trade Forex in December

admin Forex trading psychology 0 Comments

Forex trading could be a lot about timing. Knowing once to trade will have a major result on the kind of results you are going to get. Basically, you would like to trade when the market is as foreseeable because it will probably be so you'll be able to continue to work along with your current trading methodology and get the results you would like.

Many people believe, me enclosed, that the month of December is that the worst time of year to trade Forex. And also the closer we get to the vacations the worse it gets.

Why is that the case?

There are several reasons why you may wish to stay away from the market in the month of December:

Trading volume is usually down - several traders, as well as people who work for institutions, tend to require things easier at the end of the year. a lot of people take vacations, peoples spend more time on their gift shopping and Christmas preparation rather than extremely taking care of trading.

Some institutions and trading departments could even take few days off as group that is for certain to drive down the volume. A lower volume suggests that a less foreseeable market.

End of the year trading - At the end of every year, institutions and banks need to clear their books. After all, they have to show their shareholders however great they're. This can lead to some pretty creative trading tricks, someday sacrificing long term gains for short term profits.

This may cause strange and unforeseen trading decisions by major companies and banks and will cause surprises within the market. You'd better watch out for it.

The natural balance of the market is shifting as the United States, Australia, Europe, and Canada enter the vacations whereas the rest of the world continues on as they normally do. This means that the market is influenced additional by developing nations than by the Western, financial giants (with the exception of Japan). This is often yet another destabilizing issue which comes into play in December.

All that being said, you’ll be able to make money in December. Where there is trading, there are opportunities. You should make those decisions for yourself. I’m only saying that you just need to be further careful when the vacations are approaching. The market may behave in a very whack sort of way. Reduce your leverage, work with tight stop loss prices, and only go after super-high probability trades.

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