Best Time Of The Year To Day Trade

Best Time Of The Year To Day Trade

Traders tend to trade more on particular months, and stay out of the market in certain other months. Based on previous years’ trends, a trading year can be divided in thirds. It starts with the three most terrible months of summer, followed by the four best months of autumn, and end with four decent months of winter & spring.

The Reason
There’s a basic reason that drives the markets upwards or downwards in certain months and all traders should be aware of it. The trading volume dries up during any vacation period. Then, the months followed by such a period therefore witness comparatively more market activities.

The Big Drought
A 10-year analysis shows that the markets remain the poorest in the three summer months – June, July and August. Most traders tend to sell their positions in May, and try to reinvest in a fresh positions once the summer is over. They tend to say Sell In May And Go Away.

August Is the Worst Summer Month
Most investors and day traders in Europe and the North America go on holidays during the month of August. This leads to lower trading volume and significant price actions. The month is characterized by sideways trends and momentum swings. However, the trend typically breaks right after the Labor Day holiday in the U.S., and most traders returns to active trading once again. It does not mean that we can´t make money, take for example the best trading month for 2018 was July. 

Post-Summer Months (September-December)
A surge in trading activity usually occurs just after the end of summer right after the Labor Day holiday in the U.S., and traders invest in fresh portfolios and positions. These three months therefore represent the best three months to trade in the year. After a good month of August we can already see decent price action and volume coming back on the crude oil. I expect a blasting end of the year for 2019! 

Another Vacation Spot during the Second Half of December
Day traders once again stay away from the market in the second half of the December, and celebrate the Christmas Day and the New Year’s Day.

Winter-Spring Action Still Better
The January-May still does better than the summer months, providing excellent opportunities for traders, continuously for the first four months of the year.

Live trades taken in the Live trading room on September 04th 2019:

I continue to post the live day trading videos on my Youtube Channel where you can find more live trades from the last 4 years, all taken live in our Live Trading Room.

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Hope this helps,

Alexander Soares

 


Also published on Medium.