How to trade on holidays
“To trade, or not to trade, that is the question.” Apologies to Shakespeare for adulterating his famous quote from Hamlet Act 3, Scene 1, but that really is the question if you are a trader about to go on holiday. In the 2 weeks you might be away, 4 central banks will have a rate statement, 20 pieces of top tier data will be released, and that’s not to mention all the unexpected news that is going to hit the airwaves. So, do you keep active in the markets or not? Well, there is an old saying which says, ‘rules are for the obedience of fools and the guidance of wise men’. So, in light of that, we are not going to give you a rule in this article. Instead, this article will consider some of the pros and cons of trading during your holidays; you can then decide whether you want to trade or not.
The case for holiday trading
You never know when opportunity knocks
It’s true, you never know when a good opportunity will present itself. Should you just miss out on it because you are on holiday? Perhaps you catch in the news that a central bank surprises markets with an interest rate rise. Maybe Brexit is finally decided one way or the other! If you ‘know’ that over the next couple of week a country’s currency is going to appreciate. Should you miss out just because you are on holiday, when you could simply, quickly and discreetly place a trade on your phone?
Trading is mobile
Technology has developed and we should utilise it to trade from anywhere, anytime. There is no point being prisoner to a self-imposed rule that says you should or should not trade on holiday.
Trading is enjoyable
Trading is fun and enjoyable. Surely, having fun on your holiday is a good idea. So, if you enjoy trading, then why not do it on holiday?
The case against holiday trading
Unreliable internet connection
Imagine the scenario you have just entered an NZD/USD short and you know that the RBNZ’s Governor is giving a key speech in 3 hours’ time. The problem for you is that you will be on a flight during that time and unable to react to the announcement. Or perhaps another scenario, you are away for a day trip on holiday and you find that your destination has no reliable Wi-Fi. You find yourselves frantically searching for an internet connection to check on your trade. Instead of taking in your new and refreshing surroundings, you are running around looking for a signal so you can check on your trade. Not fun.
Present in body, but not in mind
Assuming that you are holiday with your loved ones and family, you will not be able to give them your proper attention. If you are worried about your position in the markets when you should be giving attention to your friends and family then you really have to question the wisdom of trading on holiday. Just because you can trade from any location, it doesn’t mean you should. If you have young children, you will never get that time with them again when they are little, so make the most of it while you still have it.
Ask your family and loved ones
Perhaps you could ask your family whether they minded if you traded during the holiday. They might say, yes, you can trade but only after everyone has gone to bed. You may find that they have very strong opinions on whether you do or don’t trade. That may help make the decision clearer for yourself and it also might help you set boundaries or parameters for trading during your vacation.
Trading is all-consuming
You don’t have to be active in the financial markets very long before you notice that they have a curiously absorbing effect, pulling you in and consuming your thoughts. This is never so true as when you are actually in a trade: How is my trade going? Has Donald Trump been tweeting anything recently? What we are trying to say is that the man tweets a lot, so, should you really inflict that level of distraction on you and possibly your loved ones on holiday?
One of the other key risks of holiday trading is that you are not necessarily well placed to make a good trading decision. Away from your desk, you don’t have the normal sources to check. You are more prone to missing some key information about your trade and making a poor decision.
Ask other traders
Finally, in making the decision why don’t you ask some other traders that you know if they trade on holiday. If they do, are they happy that they do? If they don’t, why not? You may be assisted greatly by listening to others around you who have experienced this same issue.
So there you have it, some reasons for and some reasons against trading on holiday. What about you? Do you trade on holiday?