With the winter holidays just around the corner, you should know exactly when you should stop trading and close your trades and when you should continue.

In this article you will find out how Christmas and New Year holidays affect the financial markets and I will tell you my trading plan.

First, let’s discuss what impact winter holidays have on the markets.

Winter holidays lead to a dramatic decline in trading volume.

Many traders and investors go on vacation during this time.
Large financial institutions, banks and hedge funds often operate with reduced staff and early closures or are closed entirely for holidays.

All these factors inevitably lead to this reduced trading activity.

Check out the list of official holidays in many countries.
As of Tuesday the 24th, banks in Europe, UK, USA, etc. are officially closed.

But why should you care?
If you have free time, why can’t you continue trading?

Even if you trade with technical analysis, you should understand that these are the fundamentals Main driver of significant price movements.
One of the main sources of effective fundamentals is the Economic news in the economic calendar.

Check out the economic calendar.
You can see that the last day of major press releases will be Friday, December 20th.
Afterwards the calendar is completely empty.
The lack of effective fundamentals inevitably leads to markets becoming stagnant and trading becoming very boring.



Above you can see the EURUSD price chart with the ATR technical indicator (which measures market volatility).
We see a significant decrease in volatility during the winter holiday season.

You can see a similar pattern on the gold chart.

Since major politicians go on vacation during the holiday season,
We tend to see the local relaxation of geological tensions accompanied by a Lack of significant foreign and domestic policy actions and announcements.

This is the US congressional calendar.
There have been no more meetings since December 23rd.

But there’s another reason why you shouldn’t trade during the winter holidays.

The lack of big players in the market will do this reduce overall trading volume – liquidity.
Lower liquidity will be inevitable Increase the bid/ask spread.
The widened spreads make trading more expensive, especially if you are scalping or day trading.

And when should you resume trading?

It all depends on how active the markets wake up after the holidays.
The minimum start day will be January 6th.
I don’t normally trade this week and just watch how the markets move.
I prefer to start my trading year on Monday next week, January 13th.

The holidays are the best time for you to ask questions and learn.
Choose a trading strategy to trade in the new year and sacrifice your time to test it again using different instruments.
Learn important theory and various techniques, relax and prepare for a new trading season.

Have fun, traders!

❤️Please support my work with a like, thank you!❤️