The August doldrums are real
Posted: Mon Nov 02, 2026 10:13 pm
The August doldrums are real
Late summer brings a thin market. European desks are on holiday, volume drops, and ranges narrow. Many scalpers notice that the strategies that work in spring stop working in August.
The quiet has a catch. Thin liquidity means that when news does arrive, moves overshoot. A sleepy month can contain a violent day, as several have in the past, with spreads blowing out and stops skipping.
Breakout strategies suffer in the lull, since moves lack follow-through. Reversion works better, until a shock breaks the range.
Adjusting is sensible: lower size, wider filters, and a focus on the hours when participation is highest. Some traders simply take a long holiday of their own.
It is also a good time for testing and review, since the market gives a different regime to learn from.
There is an interesting side to the doldrums. Ranges are narrow, so spreads take a larger share of the average move, and the cost per trade effectively rises even if the quoted spread does not change.
A trader who tracks the spread-to-range ratio will see it climb in August, and an adaptive filter will trade less automatically.
Another point is that the lull often ends suddenly. A single headline can restore the market in minutes, and anyone positioned for more quiet gets caught.
How have the results looked in the summer months compared with the rest of the year?
Late summer brings a thin market. European desks are on holiday, volume drops, and ranges narrow. Many scalpers notice that the strategies that work in spring stop working in August.
The quiet has a catch. Thin liquidity means that when news does arrive, moves overshoot. A sleepy month can contain a violent day, as several have in the past, with spreads blowing out and stops skipping.
Breakout strategies suffer in the lull, since moves lack follow-through. Reversion works better, until a shock breaks the range.
Adjusting is sensible: lower size, wider filters, and a focus on the hours when participation is highest. Some traders simply take a long holiday of their own.
It is also a good time for testing and review, since the market gives a different regime to learn from.
There is an interesting side to the doldrums. Ranges are narrow, so spreads take a larger share of the average move, and the cost per trade effectively rises even if the quoted spread does not change.
A trader who tracks the spread-to-range ratio will see it climb in August, and an adaptive filter will trade less automatically.
Another point is that the lull often ends suddenly. A single headline can restore the market in minutes, and anyone positioned for more quiet gets caught.
How have the results looked in the summer months compared with the rest of the year?