Whatever your religion or beliefs, there is no doubt that once again the Christmas or Holiday Season is upon us.
In the world of commerce and advertising, we start to hear about super Christmas offers from the end of September with a heightened awareness of the need to BUY – BUY - BUY right up until the eve of Christmas day.
Then immediately after Christmas, it is all BUY – BUY - BUY again as the seasonal sales in most major stores begin
However in the forex trading world, business is somewhat the exact opposite! September, October and November are historically busy months for trading with high volume, but once we get into December we need to watch out!
From the middle of December onwards we enter the slow season. With many institutes closing trading early for Christmas festivities, we have to accept that the financial investing world does not necessarily have its eye firmly on the markets. Volume dramatically recedes and the markets usually become a great deal more volatile.
Even with the best forex trading strategy it is all too easy to get caught out by suddenly reduced volume with increased volatility.
Successful individual retail traders like you and me will take this time of the year as their special family holiday time and many will not be at their residential abode during the holiday season and until well into the New Year.
Due to all this frivolity, the volume of trades being made from the 15th December until the 7th January will be extremely low and the unsuspecting newbie trader can find themselves being whipsawed viciously during these three weeks of holidays, due to nothing more than a lack of participation from the part of the big financial institutional traders and a percentage of individual traders.
During this time, new traders will find that forex trading systems which were working fine for them before the holiday period began will suddenly not work very well at all and like a dripping tap their trading capital will slowly start to leak away.
Add to this mix the possibility of a serious geo-political event, terrorism attack, change of political leader or some other significant event during the holiday period and you may suddenly find your trades going very pear shaped indeed. Certainly you may have been better employed by getting more into the holiday mood, be that sipping mulled wine and eating mince pies or whatever holiday tradition you personally prefer.
Trading is a discipline. Patience is one of the stock in trade requisites that all traders must have or develop - Likewise emotional and self control. If you find that you are tempted to trade during this very challenging period, either use these afore mentioned attributes to curb the desire, or if you really cannot stay away from the markets for even a few days, then use this time to demo trade only.
So traders beware, you have been warned. Try to stay away from the trading platforms during the Christmas Holiday season and enjoy some quality family time.
A Very Merry Christmas or Holiday Period to you all.
I start with a warning that is issued by the National Futures Association, and is actually very sound advice.
Never trade with money that if lost would adversely affect your life
One of the great dangers of this business is that over the years some rather unscrupulous people have portrayed foreign currency trading as a very lucrative way to turn a modest sum of money into a fortune with ease….If only you had their training or their system. “It’s like having your own personal ATM machine”, and other such outlandish claims of riches with ease
In fact I originally entered the Forex arena with just such beliefs.
The reality is that trading foreign currencies is far from easy and is not best suited to everyone. Whilst it is possible to make a lot of money relatively quickly, it is also possible to lose part or all of your investment with the same speed.
Most people who are highly successful in any endeavour start off with a desire to do the work. As their knowledge of the subject grows, and their passion for the subject intensifies, they find that their level of success also increases.
It is rare indeed for anyone to achieve success in any field if all they entered that enterprise for was easy money.
The only way to attempt to turn a modest sum of money into a large amount very quickly is to take some very big risks - not at all what forex trading is really about. If you want to take some hefty risks, then it might be far better to go to the roulette wheel and place all of your money on Red or Black and then cross your fingers.
I am not trying to persuade anyone to not trade the forex market, but I do want you to be aware that there is considerable risk regardless of what forex trading system you may decide to use.
On the upside, you can practice trading with a demo account which is funded with “virtual money” and practice the craft in simulated real conditions. The charts will be live and real time and you can win or lose your “virtual money” in exactly the same way as if you were forex trading for real, except that at the end of each forex trading session you have actual not put any of your real money at risk.
By practicing in this way, every “would be” forex trader has the opportunity to see first-hand whether forex trading would be suitable for them using a forex system, and bear in mind that one’s own personality, emotional control and level of self discipline will have a major impact on the way that one trades.
The secret to success in this business is to have a solid and reliable system that you have learned to trust. Then you must follow it to the letter through both wins and losses, using strict money management principles, knowing that the system, over time, generally produces more and bigger wins than losses.
Forget much of the nonsense that you may hear in the forums about setting goals of “just10 pips a day” etc., forex trading does not necessarily work in that way. The market moves with no respect whatsoever for your goal.
You have to learn to take what is on the table, and at exactly what point in the move. Some days there will be lots of profit to be made. Some days there will not be much profit. Some days the market will take YOUR money. Some days will be NO TRADE days and you will need to have the discipline and emotional control to sit and wait and smile through them all. For all of these types of days are what go to make up a traders working life.
Forex trading can be one of the most rewarding business activities on the planet. It has all the elements of high success and high failure. It is demanding and has an above average level of risk which all adds to the appeal. But it is not a business to jump into with your life savings clutched in your hand and a burning desire to be rich.
If you have a couple of thousand dollars in cash and a family to feed and the car needs fixing and the rent or mortgage is due - Then it is highly likely that the forex markets will just part you from your money.
In fact one of the biggest reasons for failure in this business is an under-funded trading account coupled with an urgent need to make some fast cash.
If you have a few thousand dollars or more put aside that if lost would not adversely affect you or your family, and if you have the time and inclination to learn how to trade first, then you may be able to turn that money into a worthwhile sum……..OVER TIME. In that case, forex trading might be the line of investment business for you. Remember though!!! There are no guarantees of success in this business.
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