Summer Doldrums and Trading Binary Options
The way in which markets are traded has definitely changed. The trading pit is a thing of the past. You can trade markets from any computer anywhere, as long as the internet is accessible.
By Darrell Martin
Wednesday, August 17, 2016 - 00:00
“Summer Doldrums” is a term used to describe July and August, but can also pertain to the time from the beginning of summer through Labor Day, as a dangerous time for traders in the stock market. It was believed that many traders were away on vacation, causing higher volatility and lower liquidity.
Does this term still have any effect today? Psychologically, it may. If a trader sees higher volatility in the market, then the blame might be placed on the Summer Doldrums, when in reality, something in the news could be the cause.
This summer, Brexit caused quite a spike in June, but according to one article, “...volume has already sunk to pre-Brexit spike levels.” (Jeffery Hirsch - http://jeffhirsch.tumblr.com)
As a trader, do you simply quit trading for the summer? Do you follow the old saying, “Sell in May and go away?” It depends on a trader’s trading system and discipline. Some gurus advise to buy and hold.
Summer Doldrums do not have to have any effect on a trader when trading on Nadex. Risk is limited and defined up front before any trade is entered. Nadex is the first and largest Commodity Futures Trading Commission (CFTC) regulated online exchange in the US offering binary options. You are able to trade binary options on a wide range of the world’s markets. You can do this from a single account on your desktop, tablet or phone knowing your funds are secure in top US banks.
Trading Nadex binary options gives you the ability to profit from short-term market moves, whether the market moves up, down or sideways. Even if the market remains flat, there are opportunities for profitability.
So, let some of the other traders take a holiday until Labor Day to avoid the Summer Doldrums. If you are new to trading Nadex binary options, take advantage of demo trading to learn how it works and test out some strategies. Otherwise, enjoy the rest of the summer trading binary options and may it be profitable!
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