With the end of the New Year’s Day holiday, we are about to usher in the Spring Festival and a series of subsequent statutory holidays. For traders, holidays often mean a special period when market liquidity decreases, volatility patterns change, and the trading environment is different from normal. How to maintain rationality and discipline before and after holidays is a skill that every professional trader needs to master.

Why Adjust Trading Strategies Before and After Holidays?

Whether Eastern or Western holidays, the market exhibits some common characteristics:

Significantly reduced liquidity: Institutional investors leave the market, and market depth decreases.

Potentially abnormal volatility: Small amounts of capital can trigger disproportionate price fluctuations.

Relatively higher trading costs: Spreads may widen, and slippage risk increases.

Market sentiment is easily influenced: Retail investor sentiment is easily swayed by the holiday atmosphere.

These changes in objective conditions require traders to adjust their expectations and strategies accordingly.

Four common traps in holiday trading

1. The anxiety of “not wanting to miss out”

Continuous market closures can easily cause trading anxiety. Some traders will rush to enter the market when the market reopens for fear of missing the so-called “opening market.” Such anxiety-driven decisions often lack adequate analysis.

Recommendations: Develop clear trading rules before and after holidays, such as “Only observe and not trade on the first trading day after the holiday” or “Only execute the preset pending order strategy.”

2. The daily rhythm is disrupted

The changes in the rhythm of life brought about by holidays – travel, family gatherings, adjustments to work and rest – will affect traders’ concentration and decision-making quality. Regularity is an important pillar of trading psychology. Once it is broken, discipline can easily loosen.

Coping suggestions: Even during the holidays, try to maintain the core transaction preparation process. If sufficient preparation time cannot be guaranteed, it is better to reduce the size of the transaction or temporarily switch to a simulation environment to maintain the feel.

3. The “strangeness” of market behavior

Market performance during holidays is often different from usual. The same technical form may produce completely different results under different liquidity environments. Using ordinary strategies to deal with special markets is like using summer equipment for the winter.

Coping suggestions: In a simulated environmentPre-test holiday strategies to see how they perform under different liquidity conditions. The simulated trading environment provided by EagleTrader allows you to become familiar with the special rhythm of the holiday market without taking real risks.

4. The superimposed effect of emotion and stress

In addition to joy, holidays may also bring additional emotional burdens such as financial pressure, family expectations, and social comparisons. These non-trading factors will subtly affect trading decisions and lead to abnormal changes in risk preferences.

Coping suggestions: Establish a simple emotional checklist and ask yourself before each transaction: “Is my current decision based on market analysis or driven by emotions?”

Three smart coping modes for holidays

Mode 1: Strategic rest period

Consider holidays as a golden window for trading system maintenance and optimization:

Review trading records in the past period and identify patterns that can be improved

Optimize trading plans and risk management rules

Test new strategy ideas in a simulated environment

For the next Make a clear plan for the trading cycle

Mode 2: Streamlined trading mode

If you choose to continue trading during the holidays, it is recommended to adopt a streamlined strategy:

Reduce the number of trading types and focus on the 1-2 most familiar markets

Reduce the size of the position and reduce the Low single transaction risk

Lengthen the decision-making cycle and avoid high-frequency operations

Set more conservative stop loss and take profit targets

Mode 3: Complete exit observation

For many experienced traders, choosing to completely exit the market during certain holidays is the best strategy. This not only protects capital, but also allows traders to observe the market’s performance during special periods with a clearer perspective and accumulate experience for future holiday trading.

Convert holidays into opportunities for strategic refinement

At EagleTrader, we have observed that traders who have maintained solid performance over the long term regard holidays as part of their strategy cycle. They usually have the following characteristics:

Predictive adjustment: Make clear strategic adjustment plans before the holidays instead of improvising.

Prioritize risk awareness: Put capital protection above capturing short-term fluctuations, knowing that “not being there” is also a strategy.

The art of balancing life and trading: clearly demarcate the boundaries between trading and rest, knowing that adequate rest is for longer-lasting focus.

Therefore, we encourage traders to regard the special periods before and after holidays as a touchstone of discipline and a window for strategy optimization. Rather than suffering from insufficient liquidity,If you are reluctant to look for opportunities in an extremely volatile market, it is better to use this time to conduct in-depth review and plan optimization.

This not only helps you effectively avoid unconventional market risks, but also allows you to be in a more fulfilling and better state to welcome the regular market after the holidays.