InstaForex

Thursday, November 29, 2012

Inside Trade | Holidays


According to Fundamentalist, world occurrences dictate the values of currencies. Entangled and struggling between the optimistic and pessimistic forthcoming while dictating its imminent effect, as so they say. Absurd maybe, but occurrences is not only limited to the scheduled and unscheduled political and economical activities. It also includes the usual activities like holidays.

How does it affect Forex?

Tackling its significance in the market gives a better understanding on the market behavior. Basically, holidays will cause a slowdown in the economy because almost everyone is not working. Even most traders would most probably want to spend their time and hard earned money with their family. As a result, it decreases the trading activity in the market thus limiting the market volatility in the process.

But there are still those who are willing to work despite the free day. Some traders still engage in trading in this times but it's dangerous and often end up on the losing side. Almost all trades are only carried out using the majors and using exotic ones could be suicidal especially if the weekend is already at hand. Also, most trades are conducted in really high volumes because the movement is limited.   

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