The Forex Trading market is at the mercy of many different factors and criteria that might even come off as a little bit of unexpected. These include many things such as the volume of trading, the sentiment of traders, the price movement patterns in technical analysis, and many other fundamental factors that also impact the foreign exchange market from outside of the market venue itself.
But there is one particular fundamental factor that might be less expected to be so impactful on this market and that is the holiday season or holidays in general. You might not even know the impact of this phenomenon on the market. But XauBot Pro has a parameter just for this purpose that can handle the volatility and unexpected impact of this outside force on the market.
So to understand this matter even better, in this article we are going to discuss the notion of holiday trading and the impact of the holiday season on the forex market. And more importantly we are going to take a look at the holiday filter parameter on XauBot Pro.
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How Do Holidays Impact Trading in the Forex Market?
As we said in the introduction, there are a lot of different factors that can impact the forex market. Some of these factors are internal and are directly related to the forex market, including technical factors that are involved in technical analysis and price movement analysis. Another group of factors that are impactful are known as fundamental factors.
Similarly, there are many different factors that are in the group of fundamental factors. One of the factors that we are discussing in this article is the holiday or the holiday season.
During these times, there can be particular behavior seen in the market. Keep in mind that when we are talking about strange market behavior with respect to holidays, we are talking about the holiday season that includes the New Year holiday and also other important holidays that have a global and international impact.
So how do these special days impact the forex market?
During important and high holidays, there are fewer market participants present in the forex market. This is completely natural because many of the market participants cannot take part in the market even if they want to. You need to know that the majority of the volume that is traded in the forex market is not done so by individual traders but rather by institutional traders. Such traders or market participants include banks, companies, firms, and even governments that have a lot of money and capital at their disposal.
So during important holidays these institutions are naturally not working. This means they are also not present in the forex market. When important market participants are not present in the market, their lack of presence means there is less trading volume in the market.
Less trading volume in the forex market also means there is less liquidity in the market. Liquidity is one of the most important factors in the forex market and in the outcome of price movements in the foreign exchange market.
All this lack of activity during the holidays and the lack of liquidity and trading volume have crucially important outcomes in the forex market. What is this impact?
Well, during the holiday season the market might exhibit unexpected and strange behavior and so there might be some unexpected price movements that can be to the detriment of your positions in the forex market.
This is precisely why it is difficult or rather challenging to trade during important holiday periods in the forex market. But how can this type of volatility be managed in the best way possible?
To find the answer to this question we turn to XauBot Pro and the feature that this automated trading tool has for this specific purpose.
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The Holidays Filter of XauBot Pro and How It Functions
So let’s turn to the holiday filter of XauBot Pro and see how this feature can help you control the impact of holidays in the forex market.
The way this parameter works is that it gives the control to choose whether this automated trading tool should keep trading during the holiday season or whether it should turn off automatically when these periods occur.
And of course similar to most other features of this trading solution, you as the user are in control of it. You can set this feature to true or false in order to choose whether you want to accept the risks associated with this period of time in the forex market or not.
Naturally, if you set this filter to true, then XauBot Pro will automatically halt all trading operations until such time that the volatility and risk associated with this time has passed.
Of course, if you want to choose a risker approach you can leave this feature as false and this means XauBot Pro will not be impacted by the holiday season and the times in which the market exhibits more unexpected behavior.
But you need to keep in mind that this parameter is part of the risk management apparatus of XauBot Pro and how this trading solution is able to keep a low drawdown and a guaranteed win rate that is above 70%.
So when you want to input the settings of this trading tool, keep in mind that this feature can help you stay away from risk more than what you should.
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Conclusion
In this article we talked about the concept of the holiday season and the impact it has on the forex market, and we saw that this phenomenon can be a risky addition to what is already a pretty risky condition in the forex market where we have unexpected price movements at times. To address this issue XauBot Pro has a parameter that is known as holiday filter. And we discussed the role of the holiday filter in controlling the volatility that is associated with this high risk period.
