Trading the quiet stretch from Christmas to New Year's Day
Posted: Sat Oct 31, 2026 10:40 pm
The last week of December is a strange market. Banks are closed, desks are empty, and the usual flow disappears. Volume drops to a fraction of normal.
The behavior is distinct. Prices drift or sit still for hours, then jump when one participant has a reason to trade. Spreads are wider than usual, and quotes can be stale. Technical levels lose their meaning, because the orders that usually defend them aren't there.
For scalpers, the thin liquidity creates two problems. Normal strategies fail, since volatility patterns differ from the rest of the year. And tail risks rise, as a single large order can move price far.
Year-end also brings balance-sheet adjustments, which affect swap points and rollover. Some brokers raise spreads or change terms for the period.
The sensible options are to skip the week, trade very small, or treat it as a separate regime with its own parameters. Strategies backtested on the full year without segmenting out the holidays can look different once those weeks are removed.
One more risk of the holiday period is the rollover. With reduced staffing, swap rates are sometimes set conservatively, and the gap between bid and ask at rollover can be wider than usual. A position that normally passes through unnoticed might pay noticeably more.
The best defense is simply to check the broker's holiday schedule. Most brokers publish adjusted trading hours, and a few close early on certain days. Spreads may be quoted wider throughout, and some pairs may be unavailable for part of the day. Planning around that, or sitting out entirely, is a respectable decision with a good track record.
How are the thin holiday weeks handled in the trading plan, and are they included in backtests?
The behavior is distinct. Prices drift or sit still for hours, then jump when one participant has a reason to trade. Spreads are wider than usual, and quotes can be stale. Technical levels lose their meaning, because the orders that usually defend them aren't there.
For scalpers, the thin liquidity creates two problems. Normal strategies fail, since volatility patterns differ from the rest of the year. And tail risks rise, as a single large order can move price far.
Year-end also brings balance-sheet adjustments, which affect swap points and rollover. Some brokers raise spreads or change terms for the period.
The sensible options are to skip the week, trade very small, or treat it as a separate regime with its own parameters. Strategies backtested on the full year without segmenting out the holidays can look different once those weeks are removed.
One more risk of the holiday period is the rollover. With reduced staffing, swap rates are sometimes set conservatively, and the gap between bid and ask at rollover can be wider than usual. A position that normally passes through unnoticed might pay noticeably more.
The best defense is simply to check the broker's holiday schedule. Most brokers publish adjusted trading hours, and a few close early on certain days. Spreads may be quoted wider throughout, and some pairs may be unavailable for part of the day. Planning around that, or sitting out entirely, is a respectable decision with a good track record.
How are the thin holiday weeks handled in the trading plan, and are they included in backtests?