Forex Trading Online // Why, When & How

Several times per year, forex traders enter a period of high risk trading. Christmas and New Year are considered to be less appropriate forex trading times, as in this time period a lot of professionals retreat from the market to enjoy the holidays. As more and more traders leave the markets, the volatility goes up. For the end of year trading high caution is advised! Depending on your risk tolerance whole month of December can be considered risky.

Because of the lower number of traders markets become more and more unpredictable. A strong trend/counter trend move might move the market much more than it had strength to move it months before. This is especially true on difficult markets (rare currency pairs) and outside of major trading hours (Asian session, scalping)…

Some forex trading robots are particularly sensitive to higher volatility (like FAPTurbo, Megadroid (read review here), IvyBot and any other scalping EAs). And running them during riskier time frame could mean that multiple stop losses could be hit – reducing your total account balance severely. But also manual trading behaves differently than before, and this includes automated forex trade signal trading – consider stopping them for this period. Therefore infrequent and newbie traders be advised, and consider taking your EA robots off the market for this period.

If you are very conservative, and want to be on the safe side, then you may want to stop trading at the end of first week of December (or earlier if there are major financial announcements scheduled for start of month). You can schedule your return to markets around 10th day of January and onwards.

I usually trade my manual trades and my robots until just before Christmas week – meaning Friday around 20th of December. I return to markets first Monday in new year, but not sooner than January 5th. Trading between these dates is something I seriously advise against. So, rather than drilling a hole in your balance sheet, take some time off, enjoy yourself, and use extra time for your friends and family. They are the most important part of your life! If you have extra time left, you can use it to analyze your trading in 2009, and maybe rethink and refine strategy for 2010; or just to optimize memory usage on your VPS…