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7 Tips for Trading During the Holidays

Day trading the E-Mini, futures and currencies at the end of the year can be tricky for a number of reasons. The follow tips will keep you on track trading the E-Mini or your favorite commodity or currency.

1. Traders who act as the underlying force behind the big moves are on vacation. Therefore, the remaining traders fight like mice pulling cheese, causing the market to move erratically. This erraticism is further influenced by press releases, quarterly earning statements and expectations.

2. Expect half days and days before holidays to also behave erratically or hardly move. Here’s a list of important dates to watch out for:

Friday, December 23 (last trading day before Christmas weekend)
Monday, December 26 (no trading – Christmas is observed)
Friday, December 30 (last trading day before New Years Eve)
Monday, January 2 (no trading – New Years Day is observed)

…Luckily, the major holidays are on the weekend. Be weary of those Fridays, however.

3. FOMC (Federal Open Market Committee) meeting days and those surrounding the meeting days, the volume becomes thin and price trades in small channels. December 13 is the last meeting in 2011.

4. Use your trading platform’s ATR (Average True Range) software to determine your targets and stops for each trade. Trade within what the market can produce at the given moment based on an ATR setting of calculating based on the last four bars. Consider holding back if the ATR is slow at 1 points or chaotic at 5+ points.

5. Santa and taxes don’t go hand-in-hand, so many traders will get out or get in large positions in anticipation of tax regulation. This creates uneven spikes in the market.

6. Seasonally, expect markets to rise this time of year. Take this into consideration, especially with long term positions. However, expect daily profits to be less as compared to other months, so prepare yourself for a lower monthly profit target.

7. Remember to prepare yourself for the upcoming year and take much needed time with your family! If the trading day just isn’t working in your favor, spend it with those whose company you enjoy.

5 Comments

  1. george
    Dec 14, 2011 @ 10:30:01

    I’m assuming by the ATR you mean the Average True Range that comes free with the charting platform. I use NinjaTrader to day trade and it’s already included there as part of their indicator list.

  2. eminiguy
    Dec 14, 2011 @ 10:34:56

    day trading the e-mini at the end of the year and/or holidays has always been a sort of a balancing act for me where I try to take enough winners and avoid trading too much to keep me afloat to the next year

  3. manny
    Dec 14, 2011 @ 10:37:59

    gr8 tips John! end of year waz alwaiz hard for me. thx and happy holidayz :)))

  4. mary d from al
    Dec 14, 2011 @ 10:40:37

    i like tip 7 the best ;)
    these are practical and will help my husband and i with our trades this season.
    bless you and wonderful holidays to you and your staff John ;)

  5. Helpful Day Trading Tips for 2012 « DayTradeToWin
    Dec 29, 2011 @ 12:48:32

    [...] 7 Tips for Trading During the Holidays [...]

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