For beginning forex traders in particular, holiday trading is very tempting. It can be difficult to pull yourself away from the excitement on the market and take a break from the action. Let’s examine some of the reasons to avoid trading on holidays.
1. No LiquidityBanks are usually closed on holidays and professional traders and big institution are on vacation. Because of this, two way trading is very limited. That means that prices can move very easily in one direction if any surprise large orders come in.
2. Unexpected BehaviorBuilding on the previous idea about liquidity, sometimes a surprising event will happen and because the markets are not liquid, they will move very quickly and sharply. These moves can take place in a blink and if you are trading, the market can make a move against you before you even have a chance to act.
The unexpected behavior is usually the exception rather than the rule. Most of the time, there is very little action in the forex market
on US holidays. For forex daytrading
purposes, technical analysis usually fails. The market is usually so slow that even if you can make money, it will probably be so little that it isn’t worth it.
4. Everyone Needs Personal TimeAbove all, you shouldn’t be trading on holidays because you have to rest sometime. It’s better to take time off and spend it with your family. That time does not come around often and it’s better to take that time off while you can. The forex trading markets are busy most of the time. Holidays are a perfect time to rest , reflect, and recharge.