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Trading on Christmas Eve

December 25, 2009 (Last updated on December 23, 2019) by

Update 2019-12-23: See the updated Christmas Eve trading post with 1998–2018 data for a more thorough review of the phenomenon.

I hope you all are enjoying the rest from the Forex trading today and didn’t lose much on the widened brokers‘ spreads yesterday.

I decided to post some interesting note about Christmas Eve Forex trading today and have done a small research of some popular currency pairs. I’ve looked at the daily ranges (Close-Open and High-Low) for EUR/USD, GBP/USD, GBP/JPY and EUR/JPY on Christmas Eve (December 24) during the last 10 years. The total gain, average gain and average volatility were calculated based on the data. First, some general notes:

  1. The period that was used is 1999–2009.
  2. There were 3 years when the trading was completely closed on December 24 due to the day being Saturday or Sunday — 2000, 2005 and 2006.
  3. The trading is limited on Christmas Eve and ends at 18:00 GMT (London close), making it 25% shorter than the average trading session.
  4. The total gain and the average gain are received by subtracting Open value from the Close level — i.e. going long on the currency pair. That means that the negative gain is the profit that could be made by going short that day.

So, the results of the research are:

EUR/USD GBP/USD GBP/JPY EUR/JPY
Total Gain: 92 26 283 236
Average Gain: 13.1 3.7 40.4 33.7
Average Volatility: 98 128 161 117

As you can see, the overall bias is bullish. Of course, 7 trading sessions is too low to be confident in any dependence, but the aim of this research isn’t a development of a trading strategy, but rather to show some interesting info about the Christmas Eve trading. GBP/JPY boasts the biggest total (and average) gain with 3 negative years (2002, 2008, 2009 but the losses were very small). GBP/USD has the lowest gain with 3 last years (2007–2009) posting rather significant drops before Christmas. EUR/JPY was the most stable on December 24 trading and had only one negative year for that day — 2001, losing 92 pips.

The average volatility is also the highest for GBP/JPY, but for all researched currency pairs it’s noticeably lower than the average volatility on normal days. And that’s logical, since December 24 has only 18 hours out of usual 24 for trading.

If you have any questions or comments regarding the Forex trading on Christmas Eve, please, feel free to reply below.

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