The Christmas rally – Your end of year bonus trading opportunity

Christmas time is a very busy and stressful time of year, especially for those who struggle to make ends meet as well as the added stress of buying presents and gifts for family and friends. However, for the traders out there, Christmas time is one of the few times when you can be certain that money is to be made. In this article we will be discussing the few ways that you can gain some pips over the Christmas period and turn a good festive period into a great one.

Retail sales is one of the most important things to look out for during the Christmas period. People are shopping to purchase presents and gifts for family and friends, more so than any other time of the year. With this knowledge, you can expect to see retail sales rise during this time of year. Retail sales for the United States are released 13 days after the month, and are considered to be the primary gauge of consumer spending throughout the country, and this accounts for a major part of the overall economic activity that occurs within the country.

The graph above displays the advanced retail sales for the US since 2010, and the blue bars highlighted in red show the result of the retail sales for November and December, with these two months being more prominent that any others. You can see that almost always the data for retail sales for November which are released in December are higher than Decembers, and some even beat their forecast, which is going to a positive sign for the currency.

Not only can you be on the lookout for retail sales figures towards the end of the year, but you can also make money off the price of popular retail stocks like Amazon increasing, due to the amount of volume that they experience at that time. Since we live in a technological age, we tend to do most of our shopping online nowadays, which has helped Amazon and eBay to become popular stocks to watch during that time of year.

One other thing that tends to happen towards the end of the year is the rise of the price of crude oil, because it can be affected by a number of things that include weather conditions, world supply and domestic production. Speaking of weather conditions, a harsh winter that has extremely cold temperatures can deeply affect the demand of oil and gas, because of the need to use more natural gas to heat up homes during extremely cold months. Inversely, if the winter is abnormally warmer for that time of year, then you can expect the demand for heating will decrease.

There are many different factors that can determine the strength or weakness of a currency, but the examples outlined above are a part of the few that can affect an economy. However because retail sales and crude oil prices are subject to change due to other factors, they might not follow the same pattern every year which makes trading them very risky and should be met with caution. Contact us at Darby Academy to learn more and devise your trading strategy for the most wonderful time of the year.