End of Year Trading

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Forex Market News

As November comes to a close with the US Thanksgiving holiday and Xmas fast approaching, now might be a good time to keep an eye out for ‘end of year’ trading volatility and market opening hours.  

Pull out your calendar, or should I say pull out your iphone and check your calendar !! There’s only 3 weeks til the Xmas week and then New Years the week after.

Financial institutions, global conglomerates and companies around the world start to wind down their operations and this all flows through to the currency markets where volumes start to drop off and as a result volatility drops off, but so also does liquidity.

This generally means that December can be relatively quiet. However, when these same institutions need to conduct end of month transactions or repatriation flows, they often have no choice but to transact, often large flows, in such an environment.  This can create some erratic sharp moves. If your new to trading, probably best to stay away. If you’re watching the markets closely and looking to get involved, this can create some profitable opportunities !  Look for spike highs and lows in ranging markets.

It’s also worth doing some forward planning and checking when your broker decides they’ve had enough for the year and closes their trading service hours. Double check !  I’ve been caught out before and it’s very frustrating. Be aware that the underlying or global wholesale market basically does not shut over the public holidays !!   Tokyo market opens Xmas day !!  Although volatility can be almost negligible, the FX market is open Boxing Day and New Year’s Day !! The closing price your broker may show on the 24th of December for instance, may be a long way off from where they open on the 29th of December at 9am !!

If that scares you, enjoy a nice long break from Friday the 19th December !!  Drink, eat and be merry and enjoy watching the Australian cricketers dismantle the South Africans in Melbourne and again in Sydney.

2015 is going to be a massive year for the financial markets. RBA rate cuts, Fed raising rates ??!!  ECB QE !!   Oil at $50 !!  Opportunities everywhere !!

Good luck !!  Buy low, sell high !!

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