Most forex traders know that when the markets are open during holidays the volume gets a little quiet. But how quiet? Without volume figures it’s not really possible to tell, is it?
To get an answer, why don’t we have a look at the fx currency futures, which do have volume and will give an accurate indication as to whether or not the reduction in volume is significant.
The following is a 30 minute chart of the British Pound currency futures over the last few days. I’ve set the chart to only display the UK session, 0800 GMT to 1700 GMT.
Monday was President’s Day in the USA. Combine that with the Chinese New Year celebrations occurring in the early part of this week, and there are a whole lot of people who won’t be trading.
You can see the level of reduction of volume is quite significant. Sure, there was price movement and perhaps you may have made some money, but an illiquid market typically has greater risk.
My preference is to just take a day off. You don’t need to trade every day.
So, any US or British holidays – they’re no trade days for me.
As a bonus, I can gloat to my ‘working’ friends that I get twice as many public holidays as they do. Just don’t tell them that the time is usually spent in studying the markets!