Home › Market News › If Holiday Markets Go Quiet, Maybe You Should Do The Same
It is now Friday, a week away from Christmas, and for many, this weekend begins an unofficial break from the holiday markets. I recognize that not everyone in my readership celebrates Christmas. For some, you may already be in Chanukah or preparing for Yule, Boxing Day, Kwanzaa, or other holidays, perhaps. Or maybe you celebrate nothing, and that’s fine as well.
Regardless of what we may personally celebrate, many nations will observe the Holiday Season by closing their commodity and equity markets for at least a day. Meanwhile, the currency markets will still be in operation, but late in the week will be without much volume. The forex markets are unlikely to make any substantial moves or trends.
The institutions tend to have key personnel stepping away from now until the New Year. Sure, there is often a rebalance of assets on the final business day of the year that spills into the first business day of the following year, but this is mostly automated and prepared in advance. Therefore, there is unlikely to be any reaction measures.
For most markets, the economic calendar is light on Monday and Tuesday, aside from the GDP number out of Great Britain on Tuesday. On Wednesday and Thursday, the calendar is mostly quiet, outside of some significant numbers from the U.S, and then on Friday, it will be a virtual standstill.
This year has been full of volatility, creating record profits for some traders. However, in the currency world, volatility has been low since May. There is always a temptation for traders to finish the year strong, and why not? Who doesn’t want their proverbial “cherry on top” at the end of the year?
However, from a trading psychology point of view, I suggest you be careful. Over the years, I’ve picked up many mental and emotional health tips, some of them through observing others and the rest through my first-hand experience. I can speak to a straightforward bit of advice, that as fun as it is to have some fulfilling trades during Christmas week, nobody enjoys losses around the holidays.
There’s a fair chance that many of us have somebody who wants to spend the holiday week with us being in a relaxed, good mood, without having to monitor quote boards. I get it; sometimes, it’s difficult to shut down from trading mode and just relax.
If you have enjoyed a good year, then the cherry on top doesn’t validate your results at the end of the year. And if it’s been a lousy year or month, you can at least let it go, enjoy your Christmas, and prepare for 2021. I’ve never seen anyone turn a losing month or year into a winning one during the Christmas week.
Alternatively, I have seen traders turn a winning month into a losing one during the holiday week, or traders trying to compensate for losses get overly aggressive in the holiday week and just ruin their season. This kind of impulsive trading typically results in a lot of sulking during what might have otherwise been a relaxing time.
If you just can’t bring yourself to let go of your charts, perhaps there are other ways whereby you may minimize risk. For example, trade smaller. This way, any losses have the potential of being less in size than usual while you are still exposing yourself to possible gains.
The point is that zeros don’t become heroes this week. Do yourself a favor, and enjoy the slower markets allowing your mind to refresh for January. This year has been one of the strangest of any of our lifetimes. Given global circumstances, it would do any of us well to step back and enjoy life transitioning from one year to the next.
