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Tips to Handle Christmas Week Volatility

by Seerat Fayaz   ·  December 23, 2021   ·  

Tips to Handle Christmas Week Volatility

by Seerat Fayaz   ·  December 23, 2021   ·  

#edgeforex #trading #market #stocks #money #forex #countries #christmas #traders #volatility #crypto #cryptocurrency #bitcoin

So the holiday season has finally here, you’ve bought all your gifts and decorated the living room, and it’s time to think about probable trading volatility in Forex rates during the Christmas break. Volatility over the Christmas trading season may wreak havoc on your trade. With banks closed and people out of work, there is also a lot of outside influence diverting your attention away from your trade. 

  • If you’re going to face the market trading turbulence, here are a few things to keep an eye out for: 
  • Banks are closed since they are the key market movers. Be prepared for very sluggish trading Trading volatility can be significantly impacted by market liquidity. 
  • Brokers frequently close. While it is becoming less prevalent as a result of the worldwide market in Forex trading, some will still close. Wide spreads should be avoided as brokers attempt to profit from poor liquidity.

Forex indicators – Due to the peculiar trading conditions, using an indicator will be less accurate during this period. Use with extreme care. 

Lack of news — a lack of news eventually equals a lack of activity, as governments shut down and media outlets shift their focus to brighter news and Christmas movies. As a result, a lack of business news indicates a lack of movement. 

Many traders will take a break during the Christmas season because they are hesitant to risk their money against low liquidity and excessive trading volatility. 

Because everyone’s backs are turned, any news articles might cause the market to jump in your favour. 

Though most traders will avoid trading, instability in Forex rates is not a friend to traders, and most will not want to leave positions open, or even start new ones, during this period.

The brokers that do operate will almost certainly want to earn a tidy profit, and spreads will almost certainly be less advantageous for traders as they try to compensate for the lack of liquidity, which will undoubtedly impair their profitability for the duration. They must still pay their employees and will try to pass on as much of the expense as feasible. 

Christmas trading will undoubtedly necessitate a particular level of risk tolerance and the usage of stop limits with extreme caution! Even with trading volatility, there is always money to be earned in the Forex market; you just have to hope you’re on the right side of fate. The ongoing epidemic has made for a wild ride in 2021, and many investors are hoping for more stable market conditions in 2022.

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