For beginning forex traders in particular, holiday trading is very tempting. It can be difficult to pull yourself away from the excitement on the market and take a break from the action. As the widely observed holidays approach, you as a trader may wonder whether it would be a good idea to trade in the foreign exchange market on these special days. Because the forex is 24-hour worldwide market, you would think that this would be the greatest of times to trade, especially since money is flowing everywhere in commerce.
You will generally find the markets open even on the major holidays like Christmas Eve and Christmas Day, New Year's Eve and New Year's Day, as well as on the U.S. Thanksgiving. Throughout the trading year, the New York session is one of the largest sessions. However, you must also remember that U.S. banks are very liberal with taking holidays off. Therefore, just because the forex market itself is considered open, that does not mean that the banks are all open and rendering full service.
Banks are major players of forex trading because a major portion of forex market’s turnover is from banks. Forex trading has managed to attract a huge number of people and they are investing in forex. In forex trading we exchange currencies and earn profit on them. Forex market exists due to global trade and highly global market place as we import/export goods from all over the world and then pays for these goods which obviously are in different currencies so without even knowing we are trading in forex.
Banks are usually closed on holidays and professional traders and big institution are on vacation. Because of this trading is very limited. That means that prices can move very easily in one direction if any surprise large orders come in. Sometimes during low liquidity, a surprising event will happen and because the markets are not liquid, they will move very quickly and sharply. These moves can take place in a blink and if you are trading, the market can make a move against you before you even have a chance to act.
The way that we use our time has become more and more important as long work hours can be a health risk, especially when it comes to trading which is very demanding business. So then should you or should you not engage in forex trading on these holidays? If you like boring and expensive trades, then go for it. Otherwise, look your loved ones in the eye and tell them that you are so thrilled to spend some quality, uninterrupted time with them.