PLUS: Which of these 3 trading topics would you like to know more about?
Have you traded your way through the ‘Summer Doldrums’ before?
There’s nothing to worry about, it’s just the seasonal nature of the markets at work.
Things can sometimes go a bit quiet.
It’s the knock-on effect the big boys have on the markets once they’ve jetted off to the South of France or the Hamptons or wherever it is they’re sunning themselves this summer.
The hedge funds and bank trading desks don’t exactly shut up shop, but the minions left behind on desk duty won’t be dropping ‘regular’ size orders. Sure, they’ll be manning the screens with an eye for opportunities and emergencies, but won’t always be authorised to trade the usual large blocks of currency.
(I know… it hasn’t stopped certain infamous individuals from doing so in the past, but that’s a story in its own right!)
What to expect in quieter summer markets
It usually means there’s lower volume at work in the markets during the summer months. And that can affect the way you see price behaving…
Volatility off the back of economic data releases can be a little harsher than usual – bands of support and resistance won’t have as much weight behind them so those reactionary moves can extend unchallenged into new territory.
Trending action tends not to get the same amount of momentum propelling it along. You’ll often see directional activity grinding its way to the upside or downside rather than going with the explosive ‘pop’ you might be used to trading.
And it could even mean the technical set-ups you follow need to be tweaked a little to accommodate the thinner volume. For example, any technical targets could be reigned in a bit… if you usually look for two times your risk as an initial target, you might be safer scaling it back to 1.5 times risk (or at least getting yourself into an early breakeven situation)…
You could introduce a ‘time-stop’ on some of your trades. If things don’t start moving in your favour within the first hour (or whatever time-scale you’re trading) exit your position with a market order. That can help you avoid getting tangled up in trades that never really get going.
And you might even look for some kind of secondary criteria to be fulfilled before entering a trade during these more treacherous conditions.
If you usually get into your trades on a reversal candlestick pattern, you might now require the market to also hold above/below the entry price for a specified period of time, making the market prove its intentions before you pull the trigger.
Anyway, August is typically the month where this seasonal behavior is most noticeable but be on your guard as we move into July. And it doesn’t mean you have to stop trading completely, just accept what the market is showing you and adjust your trading campaigns to suit.
You could maybe trade at half your normal size as an exercise in risk management, similar to what the institutions are doing themselves. Or you could adapt the “if you can’t beat ‘em, join ‘em” philosophy…
Back-off the live trading and put a bit of time into brushing up on your trade management rules, researching new methods and strategies, or even just topping up your tan on a beach somewhere!
I’ll certainly be taking advantage if we get a quieter spell over the next two months…
I’m working on a step-by-step beginners guide for the new website, and also I thought it would also be a good opportunity to ask you specifically what else you’d like to see from me.
Would you like me to go deeper into an area of trading that you’d like more help with?
The weekly newsletters will continue as normal, of course, but here’s a chance for me to go into much more detail for you.
I’d thought I’d do a trading ‘Summer Special’ for you… a no-holds-barred investigation and report into… well, whatever it is about trading you’d like me cover in more detail.
Going deep on one theme rather than skimming over a number of topics, my goal is to produce something of exceptionally high value – except you get it all for free of course!
Can you let me know what you’d like me to work on for you?
I’ve been doing a bit of brainstorming, talking to a few home-based traders, and here’s a shortlist of three ideas:
1) How to exit your trades
Most trading books/courses/systems are preoccupied with nailing accurate entry points – you know, the screenshots of charts that look impressive (in hindsight) on the page. But you can’t make money until you’ve completed the circle and put a proven exit strategy into operation.
So how about a special report into different exit strategies (including some pretty unorthodox ones)?
Just one of these exit ideas might even give a tired old system a new lease of life!
2) Broker Reviews
There was a bit of a shake-up in the world of spread-betting brokerages last autumn. One particular firm (previously a respected player) suffered an ‘embarrassment’ via its politically-connected majority shareholder. Word on the street is they are now working VERY hard to recoup and retain lost business.
Is now the right time to take advantage of their services?
Shall we take a look at what they can do for us over and above other offerings in the market? While we’re at it we could also take a good look at the state of the brokerage industry and review what we find (spread-betting and binary options included).
Or how about…
3) How to stop stressing and start winning – uncover the type of trader you REALLY are and find the perfect trading approach for YOU
You know, the big problem traders ask me about most often is finding consistency. They’ll have a great system but they just can’t put it to work effectively. Now self-discipline is one thing – as traders, we all must work on that. But the thing I see time and time again is a total incompatibility between trader and strategy. It can be a personality clash – an aggressive, hyper-active trader trying to trade a slow-moving, patience-testing, position trading strategy. But equally, it can be a conflict between a trader’s available resources – especially time and money – and the demands of his system.
So why make things harder by trying to trade in a way that’s a bad fit for you? How about I guide you through a step-by-step process that lets you uncover exactly what kind of trader you REALLY are, and then suggest trading methods and approaches that hold the greatest success potential for YOU?
Anyway, those are three ideas I’ve already got sketched out ready to go. I hope you’d find my report on any of them very useful but is there something completely different you’d like to know about with greater urgency?
Would you drop me an email to let me know?
Email kato and just type “Exits”, “Brokers” or “Stop stressing, start winning” to tell me if you’d like to see one of my three suggestions.
Or give me a little overview of what you’d like me to cover if you have a different topic in mind.
It really would help me because in the end, I want to give you whatever you’d find most useful!
Be Prepared: Market Moving Data Coming This Week (London Time):
Wednesday 18th June:
09:30 GBP MPC Meeting Minutes
19:00 USD FOMC Statements
19:30 USD Fed Chair Yellen Speaks
Thursday 19th June:
09:30 GBP Retail Sales
15:00 USD Philly Fed
Friday 20th June:
13:30 CAD Retail Sales
Monday 23rd June:
08:30 EUR German Manufacturing PMI
15:00 USD Existing Home Sales
Tuesday 24th June:
09:00 EUR German IFO Business Climate Index
15:00 USD CB Consumer Confidence
15:00 USD New Home Sales
Have a great week, brace yourself for England’s next World Cup game on Thursday, and I’ll catch up with you again soon.