Besides the frantic gift shopping, the crowded stores and shopping malls, and dealing with visiting relatives, the holidays are a time of relaxation…or so they say, right? Indeed, it’s a time when many technical analysis traders stop and step away from the markets for a while. However, it’s also a good time to develop skills, explore some new trade ideas, and test them in a demo account in hopes of using them for real at some point in the year ahead.
So, with that, here are some new trade ideas just waiting for you to test them out, and since off-market hours may be easier to come by this month, perhaps you can put the extra time to good use while also helping to prepare for a more successful 2015.
How trial by error can make you rich!
Learn to execute without loss
Do you know what kind of technical trader are you?
While live market conditions are no time to test new trade ideas or dabble in the unknown, this end-of-year down time can present an excellent opportunity to explore some other markets and see how your existing trading strategy holds up…in a simulator, of course! Try your hand in equities, or futures, or just other currency pairs outside of what you typically trade. Longer-term proponents of swing trading may like major currencies like the Swiss franc (CHF) and Canadian dollar (CAD), or even more exotic currencies like the Norwegian krone (NOK), which are known for their slower movements and more deliberate market trends.
So, if there are any markets and/or currencies you’ve had your eye on this year, what better time than now to check them out? Gaining some valuable experience will help build knowledge and confidence, and if you achieve favorable results in a large sample—meaning weeks or months, not just a few trades—you may be able to start trading these markets for real in the future. That will come in handy in low-volatility markets or anytime trade set-ups become scarce in your primary market(s).
See related: Demo Trading vs. Live Trading: Know When You’re Ready
Analyzing multiple time frames can help traders add clarity to existing trade ideas, find valuable confirmation or invalidation signals, and even locate more precise entry points. If it’s not already part of your process, though, it’s more likely to cause confusion, delayed or faulty trade execution, or even full-on “analysis paralysis.” That’s why now, while you may have the time to dabble, try looking at other time frames in addition to the daily. Going higher to the weekly and monthly charts will most always help clarify the dominant market trend, while drilling lower to the intraday frames can hold a wealth of new information you’d never see when trading end of day or on daily charts alone.
Test some familiar and/or new trade ideas using multiple time frames and see if the additional information helps or hinders your trading. If it works for you, then you can keep refining and find a place for multiple-time-frame analysis in your process. If not, though, then you’ve explored new trade ideas and perhaps cultivated a new skill or two, and it didn’t cost you anything in terms of physical account capital!
Here’s where the money is really made or lost…literally! Outside of effective risk management, nothing is more critical to profitable trading than having reliable, repeatable trade set-ups, but those don’t simply fall from the sky. They must be learned and refined, and that’s done in the practice environment, not in real market conditions! That means now is the time to try out new trade ideas where and when they can’t hurt you: in a demo account.
Analyze your trade journal and you’ll likely discover which set-up(s) are your “bread and butter,” or the ones that work for you most often. You’ll also see those that give you trouble, or ones that you may see and hear about happening in the markets, but don’t have the experience necessary to capitalize on. That’s how you know what to work on now that you have a proper chance to do so.
Gather info and read about them, practice, and consider a trader training course as you step away from the markets and focus on learning and development. It can serve as a bridge that brings new trade ideas to fruition once trading comes back into full swing after the holidays.
As the saying goes, “Everything in due time,” and for traders, perhaps now is that time; the time to explore some new trade ideas, work to develop new skills, and troubleshoot any problems or trading hang-ups that occurred recently or this past year.
If stepping away from the markets for the holidays, consider taking to the demo environment, working on your analysis and execution techniques, tightening up on risk, and testing some new trade ideas. It’s a risk-free way to learn and improve as a trader, and with plenty of practice, some of the set-ups and techniques you hone now could pay off in real market conditions in the year ahead.