Understanding Stock Market Basics
Summer is here and day traders as well as short term investors need to make adjustments in their trading style to survive the sweltering heat that frequents the long days of summer. Trading during the summer is different than other seasons.
Rule number one: load up on plenty of patience in order to survive the trading atmosphere all traders will be forced to deal with during the long hot days of summer. Traders are generally faced with lower trading volume and less friendly volatility periods however, there remains plenty of opportunities to cash in on potentially profitable trading periods. This goes for the Stock Market, Futures Market and the Forex Market.
Traders and Day Traders need to address their focus on the early trading session; the goal is to start as early as the pre-market trading period so that traders can reach their profit goal early, as well. Since many experienced traders will key in on making money early to free up their afternoon for outdoor fun, so should all traders. Set yourself up early in the trading day, get an early start and try to wrap up your day early. Aim for those daily profit goals and consider reducing your daily profit goal over the summer months. Avoid over trading and whatever you do, don’t get in the trap of making trades just to make a trade, it will cost you in the long run.
Market makers tend to be the culprit for whipotile trading action that may catch a trader on the run. Charts don’t change like the seasons do. Keep a close eye on Bollinger Bands, RSI and any other indicators you normally do. Monitor the same indicators during the summer trading season just as you do in the dead of winter. Traders may wish to be a bit more selective on the trades they take and possibly reduce your stops as well as the reducing the number of shares you normally would trade. Avoid holding out for bigger profits on positions you enter; get in, make your profits and get out. Summer is not the season to make big changes in your trading strategy however, all traders must alter their personal trading methods previously developed, while trading during the hot summer season. Basically, traders and day traders should consider developing a trading method that is utilized during the summer trading season.
On a positive note: trading, day trading and short term investing does have its advantages during the summer months. Wise trading can still produce profits while freeing up the afternoon for fun in the sun as well as increasing the free time needed to spend with family or friends.