You'll often hear that the motto of Traders is 'sell in May and go away!'  And for many Traders this is still the way that it works, they sell down before the summer then come back in September and pick up where they left off.  This applies to stock, futures and commodity traders.

Because of this the summer period is often characterized by lower volumes and at times lower volatility.  So the moves you see tend not to be as big i.e. the trade moves in your desired direction but it doesn't make it to your target exit point.  Plus the market can be more choppy so you'll see more reversing candles when you thought a move was trending.

But does this mean summer is a bad time to trade?  We think NO.  In fact we think summer is a great time to trade as not only does it enable you to keep making profits it forces you to improve your skills which means you'll be a better trader and ready for the busy Fall trading season.

Below we've outlined the key rules that will help you trade successfully during the summer months.   So it doesn't matter whether you're trading micros e-minis or e-minis on the Nasdaq, S&P, Russell2000 or Dax we've got you covered!

The same rules still apply - the markets are still trading albeit with lighter volumes but trends are patterns are still the same.  If you have a successful trading strategy then you'll know a good setup when you see one and it's still a good setup.  The underlying dynamics of the market haven't fundamentally changed.  Trust your trading skills.

Lower your expectations - what has changed though is the volume, there are fewer buyers and sellers our there so your trade may not run for as long or may not move as strongly (and it's often a combination of the two!).  Which means you need to adjust your target accordingly.  It doesn't have to mean lower profits as you can increase your contract size to compensate for the smaller moves.  Also keep an eye on your stop levels as you tend to see more reversing candles where there isn't enough volume in a move to keep it going either long or short; you might want to run a slightly tighter stop than usual.

Do the basics well - you need to make sure you are applying your trading rules consistently, this is not a time for experimentation.  Only go for the highest probability setups you know work for you, do not try anything new.  Practice good money management so make sure you have a clear point that you know you will stop trading based on your daily profit/loss.

Be aware of market updates - business and commerce don't stop during the summer so there will still be economic news updates and company updates being released.  These will still move the markets but maybe not as much as they would do if more volume was in play. 

Don't stress it! - the bottom line is that it can be more difficult to make money, particularly if you don't have a robust trading strategy.  So if it's not working for you just walk away, after all the sun is out! 

So once you've taken your summer vacation dive back into the futures markets and surf those summer profits!  If you don't have a great trading strategy that continually makes you money then set up your Personal Consultation to learn how you could be making $200 - $300 per day.

All comments are personal opinions only and not intended as investment or trading advice.  Inteligex accepts no liability or responsibility whatsoever for any loss or damage resulting from the use of Inteligex products, services or opinions incurred while trading or investing.