As Christmas draws near, it is important for binary options traders to have an understanding of the trends and events that are commonly seen during this part of the year. Without this, traders leave themselves vulnerable to potential price moves or in missing some of the advantages that can be exploited from the price activity that tends to be seen. Here, we look at some of the market characteristics that can be seen during the last weeks of December and into the New year.

The first and most important thing to remember is that the market behaves in relatively predictable ways at certain times of the year. Unsurprisingly, investors and traders are looking to close up shop and take their vacation time just like in any other business.

This, in essence, causes markets to experience lower trading volumes and when we look at the historical data, there are almost no exceptions to this rule. Since there are fewer active buyers and sellers in the markets, there are also fewer changes in price, when compared to normal trading periods.

Understanding this common behavior can be critical when making trading decisions.

5 Tips For Christmas Time Binary Options Trading, Short-Term.

Since there will generally be fewer changes in prices during the Christmas trading period, prices will typically develop tight trading ranges. This is important because certain trading styles such as trend trading or breakout trading will generally not be effective.

As an alternative, rangebound strategies tend to be the best approach.

Here, traders will be looking to buy enter into CALLS when prices approach support and sell enter into PUTS when prices hit resistance. This approach presents a very easy method of trading and since ranges tend to be predictable at this time more than any other, there is a great chance to make short term gains with binary options. And since there are fewer traders actively participating in the market, there is a possibility albeit a small one for drastic price gaps if a major order is placed.

Essentially, since there are fewer traders during these times, it is much easier for large trading orders to push the market.

Because of this, the suggested tip is to use protective measures such as stop losses or reverse options orders in order to safeguard against these moves. One essential element of trading is not only knowing when to open position but also to know when to stay out of the market.

For the most part, price activity will move very slowly during the Christmas period, and this limited price movement will also limit potential for profits.

Last, always look to check for special holiday bonuses that brokers will scheduled to entice new clients. These will often come in the form of matching deposits or in a number of commission-free trades. These offerings are more likely during the holidays and can provide a nice boost to your trading account balance.

Check out our list of approved brokers here. With online shopping on Cyber Monday this year hitting record levels, it is becoming clear that long term trends in shopping behavior are changing to favor retailers with a large internet presence. Discuss and Share more Trading Tips for Christmas Time on our Forum! For question regarding brokers — Please use our Forums.

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