Forex: Post Thanksgiving Breakout?

-
For the currency market, the Thanksgiving Day holiday usually means low liquidity and thin trading volumes. It’s a time for traders to relax, regroup and spend time with family. Most people end up taking both the Thursday and Friday off, but for those of us that are still looking trade on Friday, it is important to know that historically, the Friday after Thanksgiving, is a volatile one.

The table below shows that for the EUR/USD, GBP/USD and USD/JPY (the three most actively traded currencies), the trading range on Thanksgiving Day is usually very narrow. Between 2005 and 2007, the range between the high and low in the EUR/USD was no more than 55 pips. When the financial crisis hit in 2008, trading ranges expanded and have remained wide since then. However one pattern that has been fairly consistent is the risk of big move on the Friday after Thanksgiving.

In 2003, the daily trading range of the EUR/USD and GBP/USD tripled on Friday but in 2004 and 2005 for example, the trading range only expanded slightly. In 2006 and 2007, we saw a breakout once against in both currencies but in 2008, only the EUR/USD saw an expanded range. The GBP/USD, which already had a big move on Thursday, maintained its volatility on Friday. In 2009, the EUR/USD and GBP/USD had a big move on both days. So based upon how these currencies traded over the past 7 years, the Friday after Thanksgiving is rarely a boring one. Even though there are no major economic reports on calendar, thin volatility could lead to a breakout or expanded trading range. Interestingly e

Tnough USD/JPY typically does not move much on either day and that may be due to the fact that most of the volatility is contained within European trading hours.

Comments

  1. aditiNovember 2, 2016 at 6:39 PM

    Traders can gain beneficial information by exploring posts like these.To manage risk and returns in a better way learning about market is must. To learn live updates on stock market follow epic research .

    ReplyDelete

Post a Comment

Popular posts from this blog

No Trader Is An Island

-
Admit it. There was a time in your trading career that you thought every single forex trader other than yourself was "a few fries short of a happy meal" and didn't deserve your time of day. You thought to yourself that since only 10% of traders make it, the guy you've been arguing with on the forums about the best moving average system is probably just another unprofitable trader giving unsolicited advice. He's just one of those retail traders who spends more time lurking forex forums instead of actually trading. In trading, people are tempted to do things on their own. And who could blame them? In general, traders are competitive thinkers, and the purpose of creating systems is to have that "edge" over other traders that will lead to more profits than losses. A trader normally feels that his system is better than -insert name of disagreeable forum user here--, so why should he listen to him or her. On the other hand, for others, there is t...
Read more

why account will sharply with the results in live account

-
Today we will discuss why your results in your demo account will probably contrast sharply with the results in your live account. When most people start trading, they believe their results trading with fake money will be the same as their results trading with real money. Of course, that is almost never the case. The reason for this is that a person's emotions greatly impact their decision making ability when real money is on the line . We will go over why this is, and we will go over some tips for blurring the line between demo accounts and live accounts. First off, I want to point out that I am not slamming demo trading. Trading a demo is how everyone should learn the basic mechanics of the trading platform. It also allows people to practice following their strategy and practice entering orders. If a trader goes in a slump, it can be effective to switch to the demo for a while. When a trader is in a slump, their brain is so focused on the money they are losing that they...
Read more