Dec 202010

Last Friday I decided that I wanted to trade on simulator for the last two weeks of the year.  I had a couple reasons:

  • I have no experience trading holiday periods.  Last year I worked full time over the Christmas period to use up my budget before the end of the year.
  • Holiday periods have a reputation as being risky
  • I really need to practice on a few issues in my trading plan such as tighter stops
  • I was barely positive for December ($700) and if I lost that it’d damper my holiday spirits
  • I have a programming project that is way behind.  I am hoping to have a public demo beginning of January.
  • The kids are on vacation and it’s hard to concentrate
  • I want to spend more time with my family

I thought I only had a couple but when I list them that’s a compelling case.

So my results this week will be experimental.  I’m trying a 3-6 tick stop.  The results won’t be the same as they would during normal trading days but the practice will be good.

The bund was very strange today.  It went straight up and didn’t even bounce off some very strong resistance levels.  Then it came straight back down.  Result is -51 ticks for -510 euros.

I also traded stoxx and ironically had a great day with 2 wins.  Which confirms something I’ve always believed in:  When participation is low, the bund often has weird uncharacteristic and violent moves.  Sometimes just a small one like 10 ticks in a few seconds.  Sometimes a prolonged move like today that retraced 100%.   Now normally the bund moves but normally it’ll rotate especially around key levels.  Today it did not.  We’re talking 50 tick rotoations (look at the fractal indicator which lists the swing prices).

At 10:48 the European markets usually settle down and I thought the stoxx was going to stick around it’s VPOC.  Nope.  It broke out and moved up.  ES too.  Pretty cool move.  Someone waited for the activity to settle down and then they hit the offers hard.

And this is why it’s risky trading during the holidays.  If you’re on the right side it can be great, if you’re on the wrong side it can wipe you out.  If you’re trading, respect and maybe tighten your risk limits.  Or kick back and trade on simulator.

Whatever you decide to do, good luck with it.

  One Response to “Risks of holiday trading”

  1. Have a great Christmas and new year. Looking forward to reading your blog next year.

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