If you are planning to trade over the Christmas period, then here are five important tips you can consider ahead of time, which you may find helpful.
If you are planning to trade over the Christmas period, then here are five important things to consider ahead of time:
Be aware of lower volatility
During the Christmas period, there is typically lower market activity as many traders and financial institutions like to take a break. With lower volatility, there are usually fewer trading opportunities, as forex trading thrives on market movement. Smaller price swings mean reduced potential for making profitable, short-term trades. Traders should also be aware that potential profit during this time, may be smaller than the total cost of spreads and transaction fees. Check before you trade.
Be realistic in your goals
If you choose to trade this Christmas when trading opportunities are traditionally lower, consider making smaller, safer trades to protect your funds until market activity picks up again. If you open trades, keep a close watch on news and announcements which could cause market movement. You can also bookmark our Economic Calendar.
Check Market opening and closing times
Make sure to keep track of when your applicable Markets will be open over the holidays, as well as the possible closing times of your chosen broker. Your trades should align with these closures and your ability to reach out to client support will also be affected. Bookmark our Trading Market Hours page to ensure you have the information to hand when you need it.
Manage your risk
Reduce your risk by tightening stop-loss levels and reducing position sizes just in case there are sudden price spikes caused by unexpected news or low liquidity. Be extra cautious if you are trading exotic or less-liquid forex currency pairs.
Take time out to review and plan ahead
Use the quieter holiday period to review and analyse your trading performance throughout 2024. Take what you learned and refine your trading plan for 2025. Reflection usually brings more clarity and ensures you can kick-start the New Year with all the right information, that leads to better decision making.
