In this episode of Truth About FX, Walter talks about sun, waves, and taking the summer break off. Most of the regions are now having the much awaited summer heat — but should you ride the tide? According to Walter, it really depends on how you trade. He touches on politics, historical data, and following the trend. You will also learn here how you can work around if you really don’t want to miss the summer fun.
Download (Duration: 03:07 / 7.5 MB)
In This Episode:
00:47 – relax a bit
01:31 – full stable of traders
02:24 – eyeballing the charts
Announcer: Sometimes, forex trading is a wild and wooly place to be. That’s why Hugh is here, to post your questions to Walter, the naked forex guy. Hugh’s got questions and Walter’s got the answers. Here at the Truth About FX Podcast.
Hugh: Hi, Walter. Coming into summer right now – at least in California – and the weather is getting warm. A lot of people asked, “Should I take a break trading through the summer?”
Walter: It probably depends on how you trade. If you go back – and this actually came up last week, I think – people were talking about the same. “Hey, it’s June! Should we just relax a bit?” And I know when we’re recording this and by the time this comes out, it’s probably Christmas but I think that it’s one of those things where it’s going to depend on how you trade.
If you, for example, trade a reversion-to-the-mean type strategy, maybe you will love June and July and you find that it does quite well. I don’t think like if you look back at the D1 charts, you don’t necessarily see every June and July and August trade in a tight range.
If you go back and look, you’ll see that some years it trends quite well and the market really moves. Other years,it just kind of moves around and I know people think that they just expect it not to move very much because people are on holiday. People aren’t really getting into it and there isn’t enough full stable of traders and all that sort of things.
I actually think, where we are right now in the world, it’s really the volatility is more driven. It’s not so much cyclical. It’s more political, I think. Historically, it’s been always economic data and then a little bit of politics sprinkled in there.
Now, the markets are really looking to the politicians to try and figure out where they should go and so that can happen at any given time. I don’t think that that necessarily shuts down during Northern Hemisphere summer. wouldn’t really be that concerned about it.
If your data shows something otherwise, if you go back and you go look, “Over the last June, July and August of the last 10 years, 7 out of 10 haven’t really been good to my strategy.” Maybe you should take a break or maybe you should look into a strategy that works in tight range bound market.
But, just eyeballing the chart — so I did this the other day for somebody — we didn’t really find that that was the case. I mean, it’s not necessarily the case. I know people talked about it. Maybe might have been the case 15 years but I don’t think it’s necessarily the case now.
Even if you’re trading a daily trend system, trend following system, you’d still might find that there are some good. You might still get some entries during this time of the year.
Hugh: Okay, cool. Thanks, Walter.
Walter: Thank you.