Summer Trading – What & How You Should Trade When The Markets Slow Down
August 9, 2018
During the summer, the forex market will usually slow down. Usually in the middle of the year. The delays that have occurred during this year can be caused by conditions of moderate liquidity, lack of economic release is one of the causes, also some traders who are usually on vacation in the summer like this. In fact, some institutions are known for their massive volumes, they have a large number of employees on vacation. in the end, things like this are the cause of the decline in trading activities.
Impact of a slow or Summer Doldrums
slow markets tend to have some negative impact or effect on the trader’s psychology. To overcome the lack of the market movements, traders may be tempted to make trade more aggressively, only to “speed up” even if only a little. Unfortunately, the effect of this matter regardless of 1.How well your plans and strategies are in your trade, or 2.How experienced you are (as a trader). Low volatility can cause price movements that may be bad enough for you. Which in time will lead to minimal or fewer opportunities for forex trading itself.
For most traders, this summertime might be the time to take a break or rest from trading and doing another activity such as refreshing. Which aims to help yourself return to routine activities with fresh, new energy, in order to prepare for when the market recovers. This kind of thing can certainly be a right moment to increase forex knowledge that you need. You can also try new strategies in using a demo account or maybe even attend related events related to forex.
but, if you want to continue trading in a slow market. There are some useful tips to help you.
How do You Trade When the Forex Market is SlowDown
- Reducing Trade
The easiest and most practical thing when the market slows down is to reduce the intensity of the trade that you normally do, if you usually trade more than 2 or 3 times a week, try to reduce it to only once a week. Try to reduce the frequency of your trade from July, so that in August (mid-year when the market slows down), for example, you can get prepared for the market in the summer. You can also monitor market movements, and if the conditions permit, you can also increase the frequency of trading that you will do at certain times that have been planned.
All you have to do now is to focus and finalize the plan on the quality of the trade, not the quantity of your trade, the slowdown could not be the right and the best market conditions to open or start trading, this might be the time that can actually test your risk – tolerance.
- Move to a Daily Timeframe or period
As long as the market is slowing down, this daily chart usually tends to be more useful or reliable, because trading volume is currently low, being careful of a relatively shorter period of time can usually trap you. With this dailychart. You can get 6 different 4-hour charts, of course, this will give you the right opportunity for checking the fake mark or signal.
You must remember that when LowVolatility the technical indicators are usually more sensitive to the price movements. The longer this period lasts could also mean
more sensitive the lndicator will become. Usually, even small movements can produce quite dramatic signals
when you will start looking for trading opportunities, maybe because you are getting bored, you could make some small mistakes. If you use the Daily Chart Period you can also see or check how your currency-pair appears in all different sessions of trading around the world. So, discipline is the key that you need right now.
- Try to change your RiskReward
For now, the market is running quite slowly, reducing the risk target you have. So, if you see a risk ratio of 1 to 3 (1: 3) back to half (1: 2). But when it falls below the half ratio (1: 2), it can also be CounterProductive because it can increase the pressure make the capital you have grow. You can see a relatively higher prize risk for trading that can last more than six or seven days.
this can also be done when you have to check back to make sure whatever action you will take. Check the rate at which the pattern is usually formed, this will give the right signal, without having to pay attention to market volume. Plus it will give you more confidence that could help you making trading decisions.