Summer Means Small Ranges & Low Volume, Make The Most Of It

Summer is just around the corner.

Summer is just around the corner in the Northern Hemisphere. Long evenings, warm temperatures and weekends at the beach or the lake. Sounds great doesn’t it? While the markets may be slow, there’s still a lot that an active trader or keen investor can be doing to improve their skillsets and prepare for the second half of the year.

The long days of Summer.

Summer trading is typified by two features:

• Volume is typically lower than average. The common explanation is that traders are on holidays, maybe on the beach in the Mediterranean, or in the Hamptons. This may be true, most people do take some time off work during summer if they can. From a market perspective, volume attracts volume. With less people actively trading during the summer months, less people will trade.

• Daily ranges can tighten on low volume. This is especially true in Forex markets. It could be worthwhile reconsidering your strategy too, especially if you rely on breakouts.

For those that have been in the game for a few years, summer gives you the opportunity to relax and take Friday afternoons off early. If you’re new to trading, it’s difficult to sit back and be patient during the quiet weeks. Here’s a few suggestions on what to do with yourself that can improve your trading when August and September come around.

• Review your trading from the first half of the year. Look for areas where you can improve, identify weakness, etc.
• Do some research into what’s coming up in the second half of the year.
• If you’re an investor, review your portfolio and research your companies. Read their annual reports, take a look at the broader picture of the sector, etc.
• Learn something new that can help your trading or your careers. Learn some coding in python, improve your excel skills or improve your financial analysis.
• Take time away from the computer! Enjoy the weather, spend time with friends and family, and live a little.