Happy Martin Luther King Day: Never trade on federal holidays.

As a rule when the banks are closed you should never trade. This is because these are days where volatility is likely to be high due to thin participation in the markets. A lot of traders will be away from their desk as they enjoy a day off. Wait until the crowd is in place before you enter the market. When the crowd is present markets trade more predictably, and it's easier to make and keep your profit.

 

Wow, i never thought of that, thanks for the insight and share in that regard @Sam....i also had no clue its Martin Luther's day, i swear i do live under a rock or somehow a little bit ignorant of the on-goings around me

 

I noticed this Martin Luther Kind day annoyance when I opened yahoo finance and it told me the US markets are closed today!
Had some bond business to attend to... and obviously tomorrow I've already promised to help a relative with some renovations. Ohh well... there is always the next day.

 

Volatility can be very good for making money if you place the right bets. It's when things are slow and steady I find it's hard to earn a buck, but, to be fair, I am quite the risk taker, so I don't mind. I haven't really thought about the federal holidays angle though, so thanks for that.

 

Thanks for the insight, never looked at it that way. So it's better to keep off holidays for tradings.

 

Anyone who has done it long enough, you will notice on Holidays, especially during Christmas break/week, everything stops. Nobody is trading and the charts are stagnant. Might as well pack it up and call it week and possibly two weeks, because most pairs won't start moving until the new year. You will get movement out of the Turkish Lira, but that is a dangerous pair to play.

 

It could also give you a window of time to move into something, that too much market participation could make difficult. Or give you a larger window of time to make a decision about something that could affect your portfolio drastically.

I'd be wary of deals that look too good to be true on holidays, though. Lack of participation on busy days means the market's scared of it - lack of participation on a holiday, you don't know which way that wind is gonna blow.

 

Usually you should never trade after a three day weekend. Most of the stock market crashes happened after a long weekend. The theory is that people have the weekend to think about their trades they did on friday and on tuesday have second thoughts. By the same token I guess you should not do trades on the day before a long weekend.

 

This is good advice especially for someone who maybe wasn't sure about this and now they know.

 

While it's not the best time to actually make a move on anything, I think it can be a good time to have a look at certain markets that you wouldn't get chance to normally.