To Trade Or Not To Trade
Summer trading can be difficult. Once upon a time, “Sell in May and go away” had meaning for traders. It used to be true that folks who pushed big money around went away for the summer, the volume dropped, and volatility increased. After all, big-money traders have families, they take vacations, and generally, need some time off. But with technology creating instant access to the global markets, traders can now do all of the above and still trade forex, ETFs, futures, stocks and everything in between without a problem. This suggests that the summer trading slump no longer exists. According to this study debunking the myths of summertime trading, that might be true.
As a trader, the reality is that it doesn’t matter if it is true or not true that summer trading is habitually volatile or it lacks liquidity. Traders trade the markets regardless of season and track the market and trade based on a solid trading strategy. If the market turns volatile or the volume drops precipitously in July, August, or even January, that strategy should indicate the next move a trader should take.
Summer Trading Tips
Some will choose to sit these churning market outs, but others will dive in despite the ups and downs and the lack of liquidity. It all comes down to choice. But if traders choose to trade in the swirl of market instability, here are some basic tips to keep the boat from capsizing.
- Reduce risk by reducing the bank. Simply, bet less and less often.
- Reduce risk by setting the stops more tightly.
- Pay more careful attention to the news. The breathless media can influence the market significantly more when it is in flux.
- Choose trading spots more carefully. A trending market is more forgiving than a churning market.
- Use the “down time” to think seriously about the current trading being used and then refine it even more.
The market moves relative to events and the perception around those events. Big events include the global economic fundamentals, the patterns found in technical trading, and geopolitical happenings that can cause a market stir, and even what the breathless media says about these events.
Should traders sit out during the summer trading season because of all these reasons? Of course not!
A better strategy for summer trading is to watch and see what the action is. If it is wobbly, wade in carefully, rely on accurate trading tools a bit more, and follow the tips above. Traders can reduce the guessing game by using powerful software like VantagePoint to predict market trends 1-3 days in advance with up to 86% accuracy. With the power of Artificial Intelligence and Intermarket Analysis, traders can use this powerful tool to make money no matter what season or market condition.
The Future’s So Bright, You’ve Got To Wear Shades
Some say summer trading activity in futures is higher. Maybe, or maybe not. But the course of action for traders is still the same; Follow the trading strategy set in place, analyze the markets carefully and always rely on accurate trading tools to make informed decisions.
Become a smarter trader and survive the summer trading season with VantagePoint Trading Software. Sign up today to receive a free demonstration of VantagePoint and see how our predictive technology can help you gain an advantage over the choppy summertime markets.