It’s summer, the markets are ruled by boredom with just a few exceptions and volatility went on vacation to Hawaii or somewhere. When I look at ATR for EUR/USD, D1, I can see that exactly that the break came on first July and volatility fell from 0.015 to 0.0075, that means to 50%. Of course, it also affects our strategies.
Summer is traditionally a period when traders are doing worse because of volatility. How to fight against it?
We have two options.
Shut down our trading robots
As you may know, I’m not a supporter of the robots disconnection during the fundamental news etc. But there are two exceptions. It is summer time and the second half of December. A lot of traders will shut down trading robots for the summer. The situation is usually not so bad, but they can stay calm and they don´t not have to deal with the volatility during their holidays. This is a fairly amateur way, we can approach it differently.
Diversified Army of Strategies
If we have a diversified “army” of strategies, some of which are on stop orders, others on limits, etc., then even in this period our results are fairly balanced. Breakouts can cause some losses, but the limit strategies will make profits and the portfolio will be secured.
Personally I prefer the second way. I was profitable in July, and although it was not a record month, the profit did not really hurt me :).
How are you doing over the summer? And which way did you choose?