The period from December 25 to January 9 promises surprises. Whether they’re pleasant or unpleasant will depend on your flexibility. If you’re able to adjust, you’ll be in positive territory. If you’re a slave to habits, then it might be better to refrain from trading during this period. But we are of the opinion that if you’ve been warned, then you are armed. And the best weapon for a trader is a strategy.
What to expect from the market? Where and how will prices move? And why will Asia be calmer than the rest? The reason for the commotion is the holidays. Traders around the world will celebrate New Year’s, and that will of course affect quote movement.
Strategies for the holidays: chaotic volatility expected
Let’s consider a chain of factors that will affect price changes. And we’ll also find out what influence they will have on the market. What will change and why?
1. There will be fewer traders. Oh yes, from the 24th of December to the 2nd or 3rd of January, investors and speculators will evaluate their annual results and go off to recuperate their strength and nerves.
2. Familiar tools might not work. The total amount of trading goes down; however, the number of intra-day and short-term speculators will grow. This can significantly affect price movement.
3. Chaotic volatility. The results of 2 points, but what can be done about it. Be prepared for periods of complete calm and quiet, followed by sudden leaps and bounds.
4. Strategies? Based on everything already said, you could come to the conclusion that it’s better to choose flats anyways, but scalping strategies will produce results nearer to the end of the holidays.
5. Anticipate deceptive signals, but don’t trade following the trend, that’s not the solution. Don’t rush to close trades, consider all the nuances.
6. Don’t place fewer trades, but lower your risk to 1-0.5%. That’s a good solution if you’re afraid to make a mistake. This way losses won’t knock you off your feet, and in a few days, when you’re more acclimated, you can go back to your earlier risk tolerance.
7. It will be quieter in Asia. Of course, this will influence changes there as well, but, either way, the volatility there will be more consistent. If you want to trade normally, choose the Asian session.