Forex Markets Holidays
Seasonal factors in Forex Trading
Copyright (c) 2009 Jay Meisler
The focus of this article is on seasonal factors in the market Forex. In particular, attention is paid to start the New Year and the beginning of the post-Summer in the currency market. In terms of liquidity, the lightest of time in terms Liquidity is the last two weeks of the year and second-thinnest time of year is the last two weeks before Labor Day weekend U.S.. On after the Labor Day holiday are said to begin operations after the summer. This article aims to point out a pattern in the Forex Market often I've seen it happen at the beginning of these periods.
The reason this is noteworthy is that often there are strong movements in the currency market during the first days of the year and the summer after the Forex market slowly returns to the total liquidity position and business settings for the next period. Generally it takes days for the foreign exchange market to reach the total liquidity and movements may be exaggerated in these times. This follows a period where the positions have been cut and the risk is reduced. My experience is that the rate on the first of these periods are characterized by sharp moves the trend of failed attempts and false signals. Which is noteworthy because currency traders (and others too) often gets caught up in what appears to be rapidly developing trends, and then are forced to run for cover quickly when run out of steam and reverse. This is not always the case, but something you should know just in case.
An example is the market now, where the dollar has been under heavy selling pressure out of the box to start forex trading after summer. It is the third day today following Monday? S Labor Day and the foreign exchange market has broken out, sending the U.S. dollar to new lows for the year to date against various currency pairs like EUR / USD. Although there seems to be the legs of these exchange rate movements as the dollar's weakness was broad based, remains to be seen whether this turns out to be one of those trends faster than quickly aborted or one who follows through.
The point is, history has shown the need for caution during the first days of the new year and the beginning forex trading after summer. There is more than enough volatility in the first few days to maintain a busy businessman but try not to get carried away end with trends often see a quick end. This does not mean seeking to fade or take the other side of a trend apparent motion, but be aware that often not to proceed. While there are exceptions (the current initiatives of summer after the currency could become one), my golden rule calls for some caution in these periods. Note that I am only speaking from personal experience and not use empirical data to support my point of view.
About the Author
Jay Meisler is a co-founder of Global-View.com, the leading forex discussion site for more than a decade and where traders from around the globe come for the latest breaking news, flows, rumors and trading ideas =>http://www.global-view.com
Market Technical Analysis & Setups – Market Floats Higher On Dollar Drop and Holiday Volume