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)
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)
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)
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.
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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