2 Tips For Summer Forex Trading

Often due to low liquidity, summer forex trading can be fickle, whimsical and often times dull. Staring at charts for hours or days when the price action is slow isn’t going to make you a better trader, or make more profits. We need to be using our time to improving our edge whether we are trading or not. So what do you do when the ‘watching the corn grow‘ moments come by?

2 tips for forex summer trading 2ndskiesforex.com

Here are 2 simple tips you can do to improve your forex trading during the summer months.

 

#1 Live Simulation Trading

What I Do:  Anytime during my normal trading hours in summer when the markets simply aren’t moving, I do live forward simulation trading.

What I do is pick a system on one pair, and for 1-2hrs trade that system as the simulation unfolds in real time. You can work on your weakest/strongest system, or a price action model (i.e trading with the trend) and a skill you want to develop.

Unless you remember the 4hr charts from 12 years ago, it will be just like trading in real time with the hard right edge.  The software tracks and saves my performance, which I can then analyze and study.

I trade it exactly according to my system rules and money management just like I do in live trading.

live simulation trading 2ndskiesforex.com

 

What This Does: Trading the live forward simulation is virtually identical to real trading, and your brain doesn’t really know the difference. What it does is build the neural pathways (automaticity & autotelicity) to learn your system inside and out so when the setups appear in real life, you just pull the trigger.

It also builds confidence in the system and yourself when you see the positive results. In about 1-2hrs, I can do an entire year’s worth of trading which helps to accelerate my learning curve. I try to do about 10yrs per system, then either pick a new system, or a new pair.

During the slow summer hours, this is a great way to improve your trading, confidence, and neurological conditioning for improved performance.

For software that does live forward simulation trading, I use Forex Tester 2 which is easy to setup, great at tracking your performance, and inexpensive ($199).  Another option is Trade Interceptor (free)

 

#2 Shorten My Targets

What I Do: Less liquidity = less directional flow, meaning there will likely be a reversal if there is not enough volatility to carry the trade and direction through.

Daily ranges tend to decrease tremendously during most summer months, thus, I shorten my targets. I also reduce my stop sizes since I will not need ones as large compared to normal liquidity months.

What This Does:  Allows me to still hit my typical profit goals for the day, while not sitting around for hours while nothing happens. Remember, you are not paid by the hour – you are paid by how much you make per trade. Sitting around for days on end doing nothing, waiting to grab a simple 2:1 reward to risk play is not worth your time, especially when the same type of setup happens within a day.

waiting for days for trades

So shorten your targets and stops in relation to the decreased volatility. You can check the ATR on your time frame, and try for a target less than its value – usually around 50-80% of the ATR value. So instead of watching the charts for unproductive hours on end, remain active and make money on what opportunities are there.

Buddhist, Trader and Philanthropist

I'm Chris Capre, Founder of 2ndSkiesForex. I help traders of all levels change the way they think, trade and perform. As a professional trader, I specialize in trading price action. As a teacher, my passion lies in showing you how to re-wire your brain for successful trading. Want to improve your edge right now? Visit my Price Action Course page.

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  • samuel

    very educational. when does summer period begin?. some of us on the equator don’t even know these seasons. always sunshine.

    • Hello Samuel,

      Good question – it refers to Summer in the N. Hemisphere since the majority of all fx flows originate out of London, then NY, thus their summer times will be the most influential since it will impact their trading desks, and thus liquidity.

      Hope this clarifies it.

      Kind Regards,
      Chris Capre

  • Dave

    Hello Chris
    During the slow summer hours If there is not enough volatility to carry the trade direction through and targets are shorter eg 1 to 1 would it be wise to stay from trading if your accuracy level is below 50%

    • Hello Dave,

      If you were using the risk of ruin formula, what do you think the answer would be?

      Kind Regards,
      Chris Capre

  • samuel

    i guess am actually understanding the slow moves this june. so will july and august? waaaoh. I never thought about this before. thank you.

    • Hello Samuel,

      Each summer is different, but they are more often slow than later. July usually the same, August tends to heat up mid/late month as little Johnny goes back to school.

      Hope this helps.

      Kind Regards,
      Chris Capre

  • Dave

    Hello Chris

    After viewing the risk to ruin mathematics makes more sense.

    Thanks

  • Chris P

    Yeah it may be a good time to test the systems n have some really low targets. For others, its time to get back to class and learn some more. Here in the tropics, its winter( 15 degrees Celcius) quite cold for those of us used to 30 degrees daily

    • That it is Chris P – the key is to be using your time well, not sitting around for days doing nothing with the charts as there
      is little to no progress when doing that.

      Kind Regards,
      Chris Capre

  • Romano

    Hello Chris, its me Romano from FXStreet. I just passed by as I got to remembered you and wonder how u are doing. I quite miss your posts on FXStreet and wondered why did u stopped posting there?(u could just copy/paste things from here u know;))
    best regards ^_`

  • Sylvester M.

    This is all the Info that I need.. Clear and precise.. Nicely done!