Summer Trading: Being Patient and Selective Is Key

08/05/2015 6:00 am EST

Focus: STRATEGIES

Dave Floyd

President, Aspen Trading Group

Dave Floyd of Aspen Trading Group shares a few thoughts for newbie traders to keep in mind during the remainder of the summer. Just because markets are open, doesn't mean there are always trading opportunities. However, Dave also reminds traders not to forget that September is right around the corner and always brings a far more robust trading environment.

Traders, a couple of thoughts here as we hit the half-way mark of summer trading.

  • First, please remember it is summer. For clients who might be new to the trading world—or perhaps simply have not gained enough market perspective—keep in mind that just because markets are open does not mean that there are always trading opportunities.
  • Trading opportunities require many things, at minimum you need trends, volatility (i.e. range expansion), and participants who give a care. During the summer—players who influence the markets simply don’t care—thus trends and volatility are in short supply. It seems like only rank amateurs mistakenly care.
  • Yes, I feel strongly that the Dollar Index (DXC) is shaping up to make a push higher but timing is key. Unless prices make a nice thrust higher, we run the risk of getting long and simply seeing prices move sideways or worse, moving lower because the correction is not complete. (this has turned out to be the case, sideways chop.)
  • Witness the early action in EUR/USD, USD/CHF; both pairs started to move lower/higher respectively but since then the momentum has simply died. I suspect that this will be the end of Tuesday’s move…traders are nearly wrapped up in London and NY traders will lose interest 10-minutes ago.
  • Trading is a marathon; not a sprint. If you are gauging your trading success or experience with my service based on trade frequency and/or excitement…pack your bags, you are doomed. I trade to win, not to be entertained.
  • If you think about your trading as being akin to a sharpshooter (I know this may not be PC…sorry, get over it) you will feel far more comfortable sitting on your hands.

Stay tuned for updates—when needed—and don’t forget September is just over a month away. September always brings a far more robust trading environment.

That is not to say that there will not be trades between now and then, but bear in mind, selectivity is paramount.

By Dave Floyd of Aspen Trading Group

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