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Is Summer a Bad Season for Trading?

A number of traders have been following the strategy “Sell in May and Go Away” for many years. The months of July and August are considered to be slow for the trading market. With traders, large institutional investors and professionals going on summer holidays there is low liquidity and low volume – features that do not constitute the ideal trading conditions.

Why you shouldn’t “Sell in May and Go Away”

The markets may tend to behave more unpredictably during the summer season, but they can still be traded. Despite the seemingly unfavorable conditions, the trading market does not cease to present opportunities. A changed mindset, willingness to adapt, and alertness would help you take advantage of the summer trading doldrums. A revised trading style could be the key to turning the summer season to your trading advantage.

How to take advantage of the summer trading season

Expand to other currencies

Increasing globalisation has alleviated the extreme effects of seasonality on global markets and summer doldrums are not as extreme as they used to be a decade ago. Also, summer in the northern hemisphere means winter in the southern hemisphere and a vibrant fully functioning economy. This period could be your chance to gain exposure to currencies and assets from the other half of the world.

Take advantage of the low volume

In a low volume market environment current affairs are likely to cause significant price fluctuations and exaggerated moves. You can take advantage of these conditions by studying key economic events and placing your trades when the time is right.

Benefit from low volatility

Low trade volumes result into low volatility which offers trading opportunities. If you keep an eye on the economic calendar you can benefit from small events which will cause large market moves at a time like this.

Be patient and disciplined

With decreased liquidity, markets move less and trades tend to require more time to play out, something that affects the traders’ psychology. Patience and discipline are vital qualities for traders to possess during the summer trading conditions since it may require more time to get to targets. Boredom, the desire to counter earlier losses or the urge to experience some trading action may tempt you to take aggressive positions, but restrain yourself from such moves since it could lead to mistakes.

Trade whenever, wherever

Summer trading is at your fingertips with the cutting edge IMS MT5 trading platform available on your smartphone device and laptop. You can keep track of your accounts and take advantage of all trading opportunities with market alerts and notifications whenever, wherever. Time away from work could mean summer holidays relaxation, clearer focus to study the market and the potential to capitalise on your trades with easy access to the IMS technologically advanced platform.

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