Summer trading volume means $$$

It is summertime.  Stock traders often say “sell in May and go away”, betting on the light trading volume that summer brings to slowly grind stock indices down over the slow summer months.  But not so for day trading currency traders, who can be raking in the big pips and big bucks if they play their cards right.  Here’s some tips for light summer volume forex trading to keep the summer blahs away:

1.  Range trading is king.  With light volume often comes less ability for market makers to move currency pairs much outside their current ranges.  But this is not 100%, if there are less players in the market, then it will also take less players to move the market.  Moves can be sharp, so you have to be quick on the draw.  Typically currency pairs will move in beautiful wide swings, perfect for day traders or swing traders.

2.  Use your fibonacci tool.   For some reason the fib tool extensions seem to work even more precisely during the summer, maybe because the big money institutional traders are out of the market (they are all at the Hamptons), so us little traders can push a pair exactly to where we want it to go.  I enjoy fibbing the most recent 2 or 3 hour range ending at 7 am EST and then taking the trade to the 261% fib extension.

3.  It is summer, take your profit then go to the beach.  For intraday trading, my trade target is usually hit within 2-3 hours.  If I can be in the money by the time London closes at 11am EST, then I take the profit and shut it down.  Why waist more time waiting for the next trade set up when you can outside enjoying summer?  Take the money and run.  Tomorrow is another day.

Summertime is perfect for intraday and swing traders to rake in the big pips, due to the typical large swings that currency pairs are making.  Just be sure to be on the right side of the market’s current move and you can easily make +100 pips per day.  Rake it in now during the easy months before the big money traders come back into this market and mess everything up!  Good trading.