End of year expectations


As we approach the end of the trading year, the coming week will see liquidity dissipate in all markets as traders and investors in Europe & USA settle their positions ahead of the year-end. What does this mean for retail traders ? Well, it will mean that there will likely be an element of stagnation in markets that are in a consolidation phase, ie not in an established trend. The 'ripple effect' of any good-sized order will be amplified and there is no doubt that some people will look to exploit this. Tight SL/TP levels can easily get triggered in such markets, so the wise old owls with positions that they want to maintain will ensure that their margin is topped-up.

Trending markets should suffer from these effects less, but again, if there are Stops to be triggered then canny operators will probably try and find a way to get them filled as a way of overcoming the inertia that will exist. Markets are really very simple - they always follow the path of least resistance. If they can't get pushed one way, they will get pushed another. The end of the year can sometimes hold surprises for the unwary or unprepared, so keep your positions manageable and your margin reserve high.

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