themarketzone

Holidays Season Trading - Increased volatility and risk

FX:GBPNZD   British Pound/New Zealand Dollar
I've been asked a lot about trading during Holidays Season.
There are several things you need to be aware of if you intend to trade during Holidays Season that starts this week:

1. Low liquidity - Market is thin as banks, funds, institutions and pro traders take time off
2. Unexpected moves and increased intra-day volatility. Aggressive price reaction to minor events.
3. Frequent False Breaks - Especially in volatile pairs like $GBPNZD

This $GBPNZD chart is a great example of how 300-400 pips range with 3 major structure zones held for more than 2 weeks. Notice the multiple False Breaks to all structure zones.

In order to manage through the Holidays period here are 3 tips:
1. Use smaller positions size.
2. Use wider stop loss - Focus on Major structures and trend lines
3. Take profits on short term targets and move stop loss to BE.

Tomer, The MarketZone
This analysis is part of the Weekly Markets Analysis newsletters

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Tomer J,
The Market Zone - You trading Edge
Visit my website - http://www.themarketzone.net/
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