In Europe and in the USA one of the most important holidays of the year is Christmas, which falls on December 25th. It is officially celebrated by the following countries: Australia, Canada, EU countries, New Zealand, Switzerland, Great Britain, Germany and the USA. In addition, Christmas Eve (Christmas Eve) is celebrated on December 24, and December 26 is St. Stephen’s Day or Boxing Day. These days are official days off.
January 1 is celebrated in most countries of the world. These include: Australia, UK, EU countries, Canada, USA, New Zealand, USA, Switzerland and Japan. December 31 (New Years Eve) and January 2 in these countries, as well as January 3 (bank holiday) in the UK and Japan are official holidays.
Thus, the end of December and the beginning of January in all countries that take an active part in the FOREX market are rich in various holidays. After December 25 and until the New Year, there is nothing to do on the market – FOREX works, but the movements are minimal and difficult to predict. So it is recommended to end the activity on FOREX on December 25 of the current year (or December 23, 24, if 25 falls on one of the days off). All major players are leaving the market , and these are banks, investment funds, etc. But trading in small volumes continues during this period.
December 31 is usually a short day, but the first days of the new year FOREX does not work. In the first week of the new year, the market is also weakly traded due to weekends in Europe and the United States. Your broker will definitely send you the exact timetable of the market during the holidays.
After Christmas and before New Year, all trends are minimal, speculators and software systems make the market. This allows small participants to unpredictably influence the market and it is very difficult to predict anything in this situation. The market will become “thinner”, and therefore, even average volumes will be able to break through significant levels, or vice versa, sellers and buyers will not have the “strength” to push each other’s orders. Almost all brokers increase their spreads during the holiday periods. The dates and size of the spread widening completely depend on the specific broker, and it is impossible to give precise recommendations on how to proceed in this case. Many brokerage companies warn their clients in advance about changes in market schedules, as well as possible increases in spread values. Since liquiditylow, brokers prefer to expand the boundaries of the commission. If you decide to open a deal during the holiday period, check the size of the current spread, it may be worth postponing the opening.
At the same time, until January 10 of the new year, significant economic news is published, affecting the main currency quotes, despite the absence of large participants in the market. Such news could trigger strong currency trends after the holidays. Therefore, if the spreads are within acceptable limits and the technical and fundamental analysis data make it possible to open a deal, then this should be done in January as well.
If scalpers notice that the price is moving in a rather narrow channel, then they use this opportunity to their advantage. Let me remind you that this happens quite often when the market “weakens” and the instrument is extremely reluctant to move in either direction (meaning up or down).
In the first days after the holidays, it is worth reducing the volume of transactions, and you should not count on a solid profit. The practice of holiday trading shows that the market situation of the last 2-3 weeks of the last year, which was observed on weekly and daily charts, can usually start a reversal in the new year.
Speaking of FOREX on New Year’s holidays, one cannot fail to mention the New Year rally , which is characterized by a steady growth in the foreign exchange market. As a rule, this growth begins at the very beginning of December, but it is very difficult to predict the time of the beginning and end of the rally in advance.
The following factors influence the pre-New Year rally:
• stormy preparation for the coming year;
• the desire of companies to show good results by the end of the year;
• high level of sales in the market due to the need to fulfill the tasks of the outgoing year;
• withdrawal of investors’ funds from funds;
• general positive market sentiment;
• payments of bonuses at the end of the year.
And although the pre-New Year rally is quite frequent, no one can say for sure whether it will be this year or not.
If you use various advisors, it is recommended to disable them during the holidays. Even the most sophisticated strategy, designed to work in an active market, can show negative results at this time.
So:
• Stop trading and close all open positions and pending orders on the last trading day before Christmas December 25
• Until January 3, we rest and do not trade at all
• From January 3 to January 10, you can carefully trade small volumes
• Since January 11, we have been trading as usual