Bank Holidays are sometimes great days for traders

An article by Gus    2 Comments

Hey traders hope everyone had a good Christmas and is getting ready for the New Years party, but just wanted to put some new information in quickly before I head out to where I am going to celebrate with my friends.

Today was a banking holiday for the JPY pair and thus not a lot of movement of liquidity coming from that area. Now normally this situation is a bad time to trade and most seasoned traders would advise to just stay out of the market if one of the currency`s in the pair you are trading is having a bank holiday.

The good thing about keeping a close eye during these low volatility environments is that while one currency might not be pushing in either direction the other currency pair would probably be in charge of what happens.  As we can see today the GBP/JPY sky rocketed even though it really should have not. This was due to the JPY being on holiday trading thus not power coming from them. The GBP while it did have some good news coming out still not enough for the over 200 pip increase we saw. Here is a screen shot of the GBP/JPY,

After this one can notice how trading holidays actually benefit those that wait and see where the action comes from. I normally keep an eye on it but I was out last night and wasn’t able to get up early this morning to see it. The good thing about this type of action is that the GBP will go up all across the board. If you look at the GBP/USD it also shows a nice increase not as big as the GB/JPY but a decent 100 pips or more. Here is a screen shot of the GBP/USD,

Overall this was probably the last day or trading for us this decade, since tomorrow most trading brokers close for New Years by 2pm. Meaning we will most likely not see much movement tomorrow and if we do I will not be trading it at all. I will be driving out of town and also just recommend not to since you do not want to be stuck in a trade over New Years since prices normally change a lot when the market opens again on Monday. This means you do not want to be stuck in there and end up losing a lot of money when you access your trades next week.

Just wanted to make a quick point about what was going on this week since it has been interesting. I hope everyone enjoys the New Year celebrations and I hope everyone is enjoying the new site for GusForex. Again thank you for all the support and I will be working on the new ebook and videos this weekend.

Thank You,

Gus FX