With summer fast approaching and everyone thinking of their awesome vacation party plans, I just wanted to touch up a quick topic that everyone seems to be discussing and that is how should to handle trading in the summer or in ‘summer-like’ conditions. As we all know the markets are cyclical, which means there is going to be times when opportunities are plentiful and there are going to be times when opportunities are scarce. As a trader we should all understand that we don’t have a fix income and that if there are no trades then there are simply no trades. If you are trying to trade the same amount of volume during a slow-paced period as you would a fast-paced period, you will most likely get burned. This is definitely a mistake that I see lots of people make time and time again. When there are no good setups, there is nothing wrong with making zero, which is always a greater number than any negative number.
We’ve all heard the expression “Sell in May and Go away”, which refers to the often slow summer and early fall months as it pertains to trading. However, I don’t think that one should avoid trading altogether, just because there’s going to be less opportunities, doesn’t mean there will be no opportunities. All we really need to do is be more selective with our trades and really pick our spots. Sure, it’s probable that you won’t be profiting as much or as consistently or as easily during the slower months but there is definitely money to be made if we exercise discipline and patience.
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