For all time of existence of stock trading traders have developed many different strategies of different kind: trade with the trend and in the flat, trade of liquid assets to exotic derivatives, scalping, news trading, night trading – there are a lot of varieties of strategies. And if you do not consider yourself to be among experienced traders (the experience accumulates for years), we recommend: take our advice! On US exchanges there are several days when it is better not to trade on the exchange — the probability of loss in these days is maximum.
Days when it is better not to trade on the exchange
Statistics show that the most volatile days in NYSE and NASDAQ stock market are the following days:
The last day of the month. That same day many control to its investors. Because you need to show good reports (or at least promising), the managers are trying to get rid of bad investments and buy shares of the leaders. That is, to “clean up” the report. For long periods this is not the case, but so far the stock market is speculative, the joints of months – the days when it is better not to trade on the exchange.
The first day of the month. Here the reason is the same: the formation of new strategies leads to the fact that in the first 1-2 days demand for some action is too elevated. Someone manages to buy them at a lower position, and someone invests in the growth process. And when those who bought at the bottom, sell the stock, those who bought them later, you lose on speculative fall.
The day of publication of data on the labor market (Non-farm Payrolls). After the discount rate it is the main indicator showing the level of employment in all sectors outside of agriculture. If unemployment is rising, the stock market falls. If the market understands that the report will be positive, shares rise during the month, but if the forecast is positive, but does not meet expectations, shares fall.
The day of execution of the options. In the American market most of the options are executed weekly, but the third Friday of the month is another day when the exchange does not trade. This day closes the maximum number of options close in order not to get shares sold prior to this contract.
The date of the decision of the fed at the discount rate. Here everything seems to be clear, but not clearly. The last year is was very difficult to anticipate the fed’s action, because the stock market is winning back the decision of fed in advance. But in the case of unexpectedness, deposit is possible to be lost just within a few hours. There is another caveat: the fed meets 8 times per year )for 2 days each time). In addition to the rate decision, the fed can do other statements. As practice shows, 16% of the income from the S&P500 index falls in these days.
The date of publication of the report(of individual company by its shares). It all depends on the expectations of investors. In the case of deviations of the actual reporting of the forecast, the heavy volatility is possible.
These are the basic days when it is better not to trade in the exchange. However, if you have an understanding of the market, risk tolerance and experience, then scalpers and speculators in volatile markets earn income. The main thing is to calculate the risk and make accurate forecasts.
