Live: Summer is here

by | Jul 5, 2023 | Forex Analysis

Summer

Hi members,

Thinus and I hosted the webinar today. We went through the M2 set ups first and then Earth and Sky respectively.

Summer is here

Although I briefly discussed it in the webinar, I would like to explain more. The best months to trade or participate in the forex markets are from Martin Luther King day in January until the end of May. June till August is said to be the worst months to trade. This is because of the summer holidays. The big traders tend to be away, so there is less liquidity and volatility in the market. It can also cause a sudden volatile move in the market if there is an overreaction. Due to these reasons more often you will see the price consolidating in a range. From September, volume picks up and then drops again in December before Christmas Holidays for the same reasons.

So it makes sense to generally not trade during this time as you do need volatility to make money. If you chose to not trade you could use this time to reflect on your trading stats, review your journal, check what you are doing right and wrong, tweak your rules if they are not working, and fine-tune your strategy. This is a time when you can take a step back and see what you could change to become a better trader once markets tend to pick up the volume in September.

However, if you don’t want to do this and still want to be active in markets you have to be aware that you need to adapt. You need to be realistic with your Take profit targets and not expect big moves to happen. If the markets are going to be less volatile or stay in a range you want to be in and out of the market. Take the money the market gives you and close the trade. Dont hold trades over the weekend as I mentioned an overreaction could cause gaps at market open, especially with all the uncertainty around the world at the moment.

EURO and GBP

I explained in the webinar that things don’t look too good in Europe. Firstly the Manufacturing figures have been bad for Germany and France and have been below 50 since last August. Secondly you have riots all across France, Airports,  trains , roads are all affected by it due to a police officer shooting a 17 year old kid resulting in his death. Thefts and crime have increased in the past week and that has resulted in around 3000 arrests already, even minors. Couple of months back Macron had also changed the legal age of retirement increasing it to 64 from 62. This caused a rage within the public and wasn’t accepted by the majority. Macron said it had to be done to save the pension funds from collapsing. It goes to show how fragile the pension funds are in Europe and you cant rely or trust the government with your future.

France pension reforms

Riots costs business more than $1 billion

Then with the GBP, the pain continues for house owners who have a mortgage to pay off. The average five-year fix rises above 6%!
This is of course not good for the people paying it off as the increase in price cuts through their savings, making them live paycheck to paycheck. They predicted the interest rates to be at least 6% this year which could cause a recession in the UK. The bank seems to take that risk as they do want inflation to be back to its target sooner rather than later. Mortgage lending has dropped which is a clear indication that fewer people are buying houses due to the credit tightening conditions.

Average five-year fix rises above 6%

Check out our last post

I Am A Forex Trader Not a Gambler

650x60 100 Free training course 4

You can watch the full webinar below:

Kind regards,

Ashley and Thinus

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