Summer’s over and you know what that means – it’s time to welcome back the daddy traders and summer vacation fanatics who can’t wait to trade again! Here are some tips to get you warmed up for your post-summer trading.
1. Brace yourself for the return of liquidity and volatility
If you’re one of them trading junkies who opened trades in the past couple of weeks, then you couldn’t have missed that there were a lot of wide ranges and unsustained trends in the charts. This isn’t surprising considering that many equities and forex traders “sell in May and go away” and spend their summer months doing non-trading activities.
But now that the kids are back in school, we’ll probably see more liquidity and volatility in the charts as some traders who came back from their vacations put on their position trades. Whether or not you just came back from vacation or you traded currencies over the summer, it’s probably a good idea to keep an eye on changes in the currency pairs’ average volatility as well as possible range breakouts before putting on your first post-summer trades.
2. Get updated on the latest market themes and correlations
Are you aware that the RBA had cut its interest rates to a record low early this month? Did you know that the Fed just might decrease its asset purchases in September? Do you think that USD/JPY’s correlations with the U.S. Treasury yields and the BOJ’s monetary policy plans are still as strong as it was a few months ago?
If you have zero clue on what I just listed above, then you definitely should read up on the market themes and correlations that have been influencing currency price action for the past couple of weeks.
I’m not saying that the market-moving themes won’t change tomorrow or in the coming days. I’m saying that you probably shouldn’t trade based on the biases and tendencies that you have used before the summer. Check out Pip Diddy’s fundamental news updates if you don’t know where to start reading up!
3. Focus on your trading preparations
I’m taking a leaf from Dr. Pipslow‘s book and remind you that profitable trading requires focus, self-discipline, and consistency. You can’t develop all these traits if you spend hours looking at your friends’ summer vacation shots and their kids’ first-day-of-school pictures on Facebook.
Shrug off the vacation vibes and turn your focus into making pips. Put up your charts, read up on the latest forex news, and spend time developing your trading plans and strategies. Before you know it, you could be back in your trading zone and makin’ pips rain!
There you have it, folks! I hope that this list would make it easier for you to trade the post-summer trading environment. Don’t hesitate to share any tips that you think could help your fellow traders get back to the grind!