Hey guys. Im asking a question thats probably on the minds of some other trader's: When do you expect trading and business activity to pickup again? Next week, beginning of Jan. or even Feb? Also, does anyone know any times of the year that trading activity is the heaviest? After tax season? Before tax season? Lets start a discussion.
Define the words activity and heaviest...you'll probably get a more precise answer to your questions. With that said...I expect volatility in trading to pick up on the first trading day of the New Year in comparison to the volatility since mid-December. Also, there usually is one trading day near the mid-month of December with a volatility spike. Mar, June and Sept usually have a volatility spike that price action can't keep up with until the next volatility spike. Example is when the volatility spike occurs in March...you'll start seeing a lot more complaints by many traders until June...repeating the same complaints until Sept. A few years are different such as 2002 when when the volatility spikes occurred in July and there was a reason for such This has been the price action for many years now via viewing any index chart. As for business...depends on the business. Some business do there heaviest work during the holidays (example like transportation companies)... Doing sector analysis you will be able to see the business seasonality of any particular sector. Learning some basic seasonalities and you'll know how to better manage your position size on particular trading days of the year. Mark (a.k.a. NihabaAshi) Japanese Candlestick term
Looking at last year, volume picked up immediately after New Year's. But New Year's was a Saturday last year so volume came back on the 3rd. So expect it to come back on the 2nd or 3rd. Looking at 2005, volume hit a peak in the April time frame. It started declining halfway through May and hit bottom in June. But it didn't recover to April levels until September. But every year is different. Depends on what news is coming out when.
2005 had pretty low volatility in both stocks and bonds (the two futures I trade). As a result, my backtested system had it's third worst year in 52 years (still made money though). Hopefully, next year will be more active.
So the market doesnt wait too long. I just thought we would see a gradual increase of activity through the end of January. Well it just shows how little I know about the markets. I have been trading only for a year now.