Reasons to avoid forex trading this christmas
Forex trading can be tough and challenging during Christmas and other such holidays. Many traders take breaks from trading during such holidays. Therefore, it becomes difficult to reap profits. Holidays like Christmas, New Year, Thanksgiving are major Germany, UK, US, and Australia festivities and holidays. Just like we like to relax during the holidays, the same goes for the forex trading market. It has to boost itself up too. We would recommend traders not pursue trading from the 24th of December to the 10th of January. Here are the main reasons to avoid forex trading this Christmas.
During the Christmas holidays, the forex market witnesses very low liquidity as most of the big traders and leaders take a vacation from trading. This reduces liquidity. The big players know their trade well, so they do not want to risk it by trading in holidays.
We all know that in forex market trading, there is an impulsive non-volatile trend that is imbibed by market giants, and the other one is the volatile collective trend. During such extreme impulse, the market let's traders earn a lot of profits. But the absence of the market giants will constantly keep the movement volatile. The high volatility may not lead prices anywhere after eating up the profits and creating false breakages. Since top players will be out of the market, no one can produce any interest in the in currency pairs. This will result in a ranging market. Therefore, there is no way to make considerate profits.
A rat trap of brokers
The reason why forex brokers increase the spreads during holidays like Christmas is low liquidity in the forex trading market. Therefore, many small traders face risks. There is ambiguity associated with when the brokers will raise the spreads. It is important to check spreads before opening any trade positions. One must look out for a well regulated and authorised broker to reduce the risks. If you are glancing for an online broker to facilitate forex trading, we would recommend Brokereo. Brokereo is a regulated broker offering trade in a wide range of securities like forex, indices, stocks, ETFs, CFDs, commodities, and more. They are also offering some discounts to traders this Christmas. So go and sign up with Brokereo before you miss out! After the holiday season is over, the spreads will come back to their original reduced state. This means top players are back in the market.
Extremely unpredictable market conditions
Forex trading is decentralised in nature. No one knows when the value of currency pairs will hike up or fall down. Most of the traders and investors depend on predictability to analyse the trends and market. If their predictions work well, they enjoy profits. On the other hand, when these predictions go haw way, traders ought to lose money. So when do such predictions work best in forex trading? When there are major players and giants indulged in the market. During holidays like Christmas, it is complicated to predict the forex market as there are no stable trends visible. One should also avoid using tools and indicators to predict the market possibilities during the holiday season. The market tends to mislead the algorithm during the holiday season.
Prepare yourself for the coming year trade
Do not overburden yourself just for the sake of it. This might harm your mental and physical health. Give yourself a break when the forex trading market is also taking a break. You should pass some time out of the market and prepare yourself for the market when it gets back to its feet again. Plan for your next year's trading blueprint during this time.
The Forex trading market is one of the most voluminous and liquid markets. But it loses all its charm during the holiday season as most of the traders and investors withdraw from the market. Therefore, it is better not to pursue trade during this period. However, if you are still interested in pursuing forex trading this holiday season, then you need to prepare yourself with utter caution and a risk management system. You might be able to make some profits, but it is not that promisable anymore. December is one difficult time for many traders. We would recommend traders to turn their heads towards the stock market instead of forex trading. At the end of December, you can make some considerable profits in the stock market. Dividends stocks can provide good returns.