Beware Holiday Volume

Trading during the holiday season can bring some interesting developments. Volume is different. It is lighter with lighter liquidity. It means that the markets can move fast. You might think the markets are going to be slow, and yes, they will be slow, but then they can move like lightning! It doesn’t take nearly as many orders to bully around the market when there is no one around to get in the way. Trade with caution. Make sure that you are trading with defined risk.

What Makes The Holidays Different?
When trading around the holidays, you may wonder why the difference. Not the same people are there trading. It is similar to driving. There are usually many more cars during rush hour traffic than at midnight, of course depending on where you live. Seasons can also change the traffic situations. If there is an ice storm in Dallas, where there are five-million people and two ice plows, most drivers are going to stay off the roads. Different seasons, different reasons.

Holiday
Dictionary.com has several definitions for the word holiday, but most define it as a day or a time when work or business is suspended for a time. With this in mind, during the holidays is a time to do one of the smartest and hardest things to do when trading and that is to take a holiday! Take the week off! There are some traders who stop trading the week before Thanksgiving and do not come back to trading until two weeks after New Year’s Day, just because the volume changes so much.

Keep Risk In Check
If you decide to continue trading through the holidays, consider not trading as heavily. Be sure to keep your risk in check. There is nothing that would dampen your holiday spirit like wiping out your trading account. Trade with light volume.

Slow Down To Speed Up
Darrell’s daughter Felicity is training with Lynn K. Brown, a “guru” of horse training. Although Felicity has won numerous awards and is graduating to the next level, she is preparing for the New Year and the new season by going back to the basic. She knows some of the competitions won’t be as easy. Instead of running around the barrels in an attempt to increase speed, Brown is teaching her that in order to speed up, she has to slow down. Of course Felicity wants to go faster and faster, but what you can’t do well slowly, you can’t do well fast. The errors only increase when you increase your speed.

Trading is like that, too. What you can’t do in demo, you can’t do in live. What you can’t do with one contract, you can’t do with one-hundred contracts. Take this time to get ready for next season and sharpen your skills. Make this a time to educate yourself.

Relax
If you want to master how to trade this holiday season, you need to master how to relax! Demo trade to learn how the markets will move. It is sporadic and sometimes scary. It can be boring and then just explode, especially around any news. Watch the season and how it unfolds in the markets and learn from it. Sit back and work on slowing down in order to master some basics. Get down knowing exactly how you are going to do your entries or your stops. You could go back over months of charts to see how well your entries and stops or certain strategies would have played out.

Consistency
Work on your consistency so that when things speed back up and you’re using real money, your trading is automatic. When the market returns to normal, there is not time to think. Your trading has to be muscle memory because things are real, live and fast. Use this holiday time to get that muscle memory down. You can then come back and have the best trading year of your life in 2016.

All of the education is available free at www.apexinvesting.com. You will also find traders there to help you as you increase your knowledge and practice different strategies.