Should You Trade Thanksgiving Week?

Hey guys,

Just a quick heads up for those of you getting ready to trade this week. I usually steer clear of trading US Thanksgiving week as the market can become unpredictable. if you’re a newbie or if you simple want to play it safe you should consider taking this week off.

Personally I finished trading for 2010 on the first week of November. I usually like to give myself December off. However, this year I thought I would treat myself with an extra month! So I defintely wont be trading this week.

Just for fun, lets take a look at the GBP/USD 4hr chart for Thanksgiving week 2007-2009.

Blue lines = Thanksgiving day
Red lines = Thanksgiving week
Average weekly range is based on the three weeks prior to Thanksgiving week.

Thanksgiving 2007 (November 22)

trading on thanks giving in 2007
Thanksgiving week range = 314 pips
Average weekly range = 410 pips
Thanksgiving day range = 74 pips

In 2007 Thanksgiving week gave us a large decrease in volatility. The average weekly range for the three weeks prior was 410 pips. On Thanksgiving week we saw a 314 pip range which suggest low volatility. Thanksgiving day in particular had a very low range of only 74 pips and the market was very choppy. So Thanksgiving week 2007 looks like it would have been hard going for traders.

Thanksgiving 2008 (November 27)

trading on thanks giving in 2008
Thanksgiving week range = 696 pips
Average weekly range = 930 pips
Thanksgiving day range = 201 pips

In 2008 Thanksgiving week again showed decreased volatility when compared to the rest of November. From the charts you can see that the market became extremely choppy from the 26 of November onwards. The charts show that trading could have been good on the Monday and Tuesday but Wednesday through Friday the market was volatile and choppy. On Thanksgiving day we can see there was a 201 pip range which would likely have been difficult to trade given the choppiness.

Thanksgiving 2009 (November 26)

trading on thanks giving in 2009
Thanksgiving week range = 475 pips
Average weekly range = 373 pips
Thanksgiving day range = 313 pips

In 2009 we had a crazy Thanksgiving week. The market moved well beyond its average for the month moving 313 pips on Thanksgiving day alone. This made Thanksgiving day the largest single day move in the whole of November. The price moved very consistently in a bearish direction so there was some great profit opportunity there. So 2009 was definitely a good year to be trading Thanksgiving week.

Summary

Thanksgiving week can get very unpredictable very fast. So my personal opinion is not to trade Thanksgiving week, especially if you’re a newbie.

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20 thoughts on “Should You Trade Thanksgiving Week?
  1. Nick you are probably right however this is an unpredictable market, such as EUR/USD moving over 125 pips so far this A.M. (Ireland deal probably) Nice of you for always thinking of us. Enjoy.

  2. I disagree, I took eighty pips off the Euro. I belive in taking what the market will present at the time of trading. The pro’s certainly don’t take time off. This is prime time to take advantage of a market that is beginning to trend.

  3. @fun2bfree:

    Pros certainly do take time off for Thanksgiving seeing as its a bank holiday and all :). Furthermore, if they do not take time off when would they spend all that money they’re making?

    I consider myself a pro and I always take 1-2 months off each year. I allows me to come back in January with a clean and fresh mind.

    The market can be erratic at certain times of the year. I find that it is best to take a step back when it is erratic.

  4. “The price moved very consistently in a bullish direction so there was some great profit opportunity there.”

    Hi Nick,
    Just a little correction. It seems to me it was a bearish direction. Thank you anyway for warning us!

  5. @Irwin:

    I think that the E/U craziness has a lot to do with Ireland. Another reason to stay out of the market. Well that is unless you use fundamental analysis in your trading. I think fun2bfree probably made pips off the back of the Ireland debacle.

  6. Thanks Nick. Hadn’t thought of that one even though it would seem sensible. Living now in Australia, it’s been a few years since I even thought about T-giving (except for working and not getting the time off).

  7. The big Thanksgiving Day move was Dubai announcing it was broke… Up 200 pips in the morning down 200 after dinner. Stuff happens when the US rests.

  8. Am always on the look out for range breakouts during this time of the year,just in case something go burst. I would be happy to be recalled back from holidays.

    In this market anything is possible,my ears are on the ground just in case we have surprises & the market decides to give us some holiday presents, which may include a free ticket to the moon without the need to belt up.:D

  9. TOTALLY agree. And I think you’re pretty much right about December, too. Although it seems like a long time to be away. Maybe just cut back a bit?