Asian man trading on the market online with his laptop in the front of the blue ocean. Image source: lordgarn © 123RF.com
Your summer holidays are now over. The days of leisurely watching the waves splash on the shore while drinking your ice-cold Mojito on the beach are now over. It is time to return to the market and get back into the right mentality.
But the transition from a relaxed state of mind to the laser-focused attention to small details demanded by your trading strategy can be daunting. That is why we share our top three picks of things you can do right now to get into the right state of mind and have the smoothest possible return to the world of trading.
You are not in Ibiza anymore, Dorothy! Don't expect everything to be peachy
After their summer holidays, a common mistake traders make is to return to the market in an overly optimistic state of mind. We are not trying to say that you should be gloomy and depressed in order to succeed, quite the contrary actually. However, too much excitement can cloud your judgement and perceptions.
Emotional decision-making leads to rash and spontaneous trades, which you wouldn't otherwise make. In most cases, traders set unrealistic expectations for what their post-holidays performance could be. The inevitable subsequent disappointment could then blast them into the opposite sentimental extreme of doom and gloom.
In order to "acclimatise" to the market in your first few days back, it would be a good idea to refrain from placing any positions. Even if you spot an opportunity, you wouldn't be certain if your judgement isn't askew. You can write down the hypothetical entry and exit levels of such an imagined trade in your trading journal, and then monitor the further behaviour of the market.
If the market does go on to behave as initially expected, that would mean that your perceptions are not jeopardised by your emotions.
Don't wait for the 1st of January to start going to the gym
The effect of market seasonality is especially pronounced in the months of July and August. As the overall trading volume increases parallel to many small retail traders' return, the levels of adverse volatility rise markedly. That is owing to all of the extra noise that is prompted by this heightened market activity.
The general enthusiasm of traders returning from their summer holidays can be compared to what happens during each new year's first few working days. This is referred to as the "New Year resolution" effect.
How many people do you know who decide to change their lifestyles for the better at the beginning of each new year? One of the most common resolutions inevitably includes the decision to start going to the gym. What happens, in reality, is that gyms stay packed for the first couple of weeks of January before the enthusiasm starts to subside.
Avoid being "that guy" on the market. Remember that trading is more of a marathon rather than a sprint, so you do not have to become a millionaire on your first week back. Remember that on the market, patience is a virtue. That is why you have to maintain your composure and avoid trading on the frenzy prompted by mass-market psychology.
Don't join the herd, be a critical thinker
As mentioned above, with the return of all of the small retail traders, the so-called herd mentality becomes the norm. This is what John M. Keynes referred to as "animal spirits". Typically, higher-risk assets become more volatile as enthusiasm-driven demand for them surges.
Think about Bitcoin, which is currently undergoing through a difficult patch. Excited beach enthusiasts are now likely to drive the demand for the cryptocurrency up, as they already plan for their next year's summer holidays. As soon as the underlying price starts to appreciate, more and more traders would likely rush to join the hype train.
The impact of such mass-market psychology epitomises the fear of missing out (FOMO), which is not a good enough of a reason to sustain a prolonged uptrend. And market wales recognise that. Seasoned traders know that excited retail traders waiting for the next big move are likely to place very narrow stop-losses below their entries.
All of this creates the ingredients for a perfect market storm - a bull trap. Market wales love to prey on small retail traders by placing opposite orders. The idea is to drive the price action towards the majority of stop-losses in order to create temporary discrepancies in the underlying supply and demand equilibrium.
The big outtake here is not to rush to join "the next big movement" on the first early indication that you spot. Your summer holidays may be over, but your trading carrier doesn't have to follow suit. Be smart, be patient, be safe.
Over the past few weeks, the USD has lost nearly 800 pips against the JPY, driven by Japan's shift away from decades of negative interest rates. With the Bank of Japan raising rates for the second time in a row, investors are adjusting their positions to [...]
Despite its volatility, Silver remains in an uptrend. While not as dynamic as Gold, XAG often mirrors XAU’s movements. A Multiple Top has formed around $32.50, and history shows that the more a level is tested, the weaker it becomes, increasing the likelihood of a [...]
A combination of factors, including Trump-era tariffs, the emergence of DeepSeek, and a slowdown in GDP growth, has contributed to the recent pullback in the US30 from its record highs. From a technical standpoint, a Double Top pattern has formed around the [...]
Over the past month, Silver has experienced an impressive 13% surge, marking a strong bullish trend. Despite notable volatility and multiple pullbacks, the overall momentum remains firmly to the upside. This strength is further validated by the Golden Cross, a historically reliable [...]
The Swiss Stock Market has been on a remarkable rally, surging over 15% between December and January. At times, the price action resembled a near-vertical ascent. However, following the announcement of Trump’s tariffs over the weekend, Monday’s trading session opened with a [...]
Between October and January, GBPUSD experienced a significant decline, dropping by approximately 1300 pips. However, we now observe signs of a potential trend reversal. Over the past few weeks, the pair has rebounded by more than 400 pips, shifting momentum toward a [...]
For the past 1 month, the UK100 saw a fantastic 600 point rally! The occasional corrections only attracted more buyers, which is healthy for the current up trend and the RSI currently exhibits elevated demand. A 130 point correction started last week on Friday, dipped below the [...]
Over the past two weeks, Japan’s leading stock index surged 2,000 points, reflecting strong bullish momentum. However, this week saw a sharp sell-off, erasing nearly all gains since mid-January. Despite this drop, the decline stalled at the 61.8% Fibonacci retracement, a key [...]
There is a clear shift in the momentum in the Oil market, with the commodity dropping with nearly 10% for the past 2 weeks. The Death Cross, a classic sell signal, is indicating that sellers are indeed in control and we are lookin now at a strong [...]
The 350 pip rally for the past 2 weeks seems like a trend reversal for EURUSD, with buyers back in control. The strong bullish momentum is also confirmed by the Golden Cross, a historic buy signal. Corrections are healthy for the trend and we currently looking at [...]
For the past 2 weeks GBPUSD went up with 400 pips and this is why we believe we might be looking at a trend reversal. The strong bullish momentum is confirmed by the Golden Cross, a classic buy signal, which supports the hypothesis that [...]
The Death Cross formation in USDJPY signals a robust downward momentum, with the USD depreciating by 300 pips over recent weeks. Further declines exceeding 300 pips are anticipated, potentially reaching the 152.00 level. Despite several corrective pullbacks, the price has been unable to surpass the [...]
Following the formation of a Double Top pattern at the 21,930 level last Friday, the NASDAQ has experienced a significant decline, plummeting by nearly 800 points. This downturn has been primarily driven by unfavorable manufacturing data emerging from China, alongside the Bank of Japan's interest rate hike on Friday. The market reaction closely resembles the [...]
GOLD's uptrend has regained strength, with several factors supporting further gains. The RSI bounced from oversold levels and now stands at 65, signaling growing demand and increasing buying volume. Additionally, the appearance of a [...]
For the past few months, USDJPY gained 2100 pips! Then, about 10 days ago the USD started dropping and so far corrected with 300 pips, dropping down to 155.00. A local Double Bottom got formed and this level also aligns with the important [...]
For the past week, the US100 has surged by over 1,000 points, signaling strong bullish momentum. The RSI stands at 69, indicating high demand and buyer dominance. A bullish Golden Cross pattern has emerged, confirming the upward trend. Despite a brief correction yesterday, with the index dipping to [...]
The Descending Triangle on the 4-hour chart, typically a bearish signal, failed to materialize this time. Instead, the Triple Bottom support at 92,000 held strong, driving significant buying volume. A Golden Cross—a classic bullish indicator—confirms strong [...]
After a 300-point correction from its December highs, the SP500 appears to be rebounding as bulls regain control. This recovery is supported by positive economic data, including strong NFP numbers, low unemployment, and CPI readings meeting expectations—all favorable for stocks. Additionally, the earnings season began yesterday with [...]
For several months, the EUR has been trending downward, losing hundreds of pips. While occasional corrections to the upside occur, bears remain in control. The strong downward momentum is highlighted by the Death Cross pattern, a classic sell signal. Yesterday, we observed another [...]
The Dollar remains strong, with buyers firmly in control since the Fed's December comments hinting at fewer 2025 rate cuts. This drove a 400-pip rally in USDCAD, now facing resistance near 1.4450 as early buyers take profit. Corrections are part of healthy trends, and the pair is testing support at [...]
