As the year is coming to an end, it is the best time to start planning your trading approach for 2021. There are many factors to consider and doing it well in advance will give you time to think it through and prepare. This is also the time when you may consider seasonal changes as well as major events that might influence the market. We have compiled a list of factors you might want to consider when picking assets and planning your trading approach for the foreseeable future.
Seasonal patterns
December and January are historically the most successful months of the year, while the months of September and October show the worst overall performance. Seasonal patterns are hard to explain, but supply and demand are seasonally affected in most, if not all, industries. Noticing this and planning your approach accordingly may not just improve it, but also give you a better understanding of the market.
The January Effect
The January Effect refers to a seasonal raise of the stock prices that can be noticed in the beginning of the year. The reason for this is the increase in purchasing of the stocks, that follows the usual drop of prices in December. The drop in prices, among other reasons, is caused by the sell-off from investors, pursuing tax-loss harvesting. The January price increase may also be connected with investor psychology: many traders believe that it is the best month to purchase stocks and begin their investment plan for the year.
Although one could attempt to take advantage of this phenomenon, it is important to note that many traders know about this effect and time their deals accordingly. This might diminish the January Effect on the market or nullify it completely.
Distribution of the COVID-19 vaccine
It is not long until the COVID-19 vaccine will finally be distributed. With the access to the vaccine, the uncertainty is expected to decrease and the economy — to gradually recover from the damage. Though the forecasts differ from one economist to another, many of them agree that 2021 is expected to be a favorable year for S&P500, for example.
Still, it is crucial to recognize that part of the vaccine-related optimist has already settled in and had its effect on the market. When choosing the assets to invest in, it might be a good idea to evaluate their past performance and consider a risk management strategy in case your prediction does not get fulfilled. However, it is important to remember that past performance is not a 100% indication for future performance.
Major events
2021 is scheduled to host most of the major events that were cancelled in 2020 — the 2020 Summer Olympics, UEFA Euro 2020, Eurovision contest and Expo 2020. While the events are still far from now, you may mark them in your trading calendar and check the assets that could possibly be affected by these events or their further postponement.
Conclusion
Keeping track of the main events, holidays and seasonal changes throughout the year might be a useful addition to your current trading approach. This may allow you to gain more perspective when entering new deals and time them more appropriately. Add the above mentioned factors to your trading calendar and get ready for 2021!
Thanks for the update it was very helpful
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Very fabulous, I’m very great full for the updates
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Thanks for the update it was very helpful
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Thank you for updating us it was very helpful
Thanks for taking the time to rate us. It really helps us to keep going and delivering the best 🙂
You writting is so easy to follow. I really like the way you do it. Last article I read from you about Elliot Waves was the inflexion point of my trading. Thank to that, today I’m trading based in that theory.
I just want to say you THANK YOU so much for helping me!
Thanks for your support all along, Aneudy! We will keep working to provide the best user experience! 🙂
Thank you for this information , it will really help in my planning. But please what is the full meaning of CFDs
Hello Dear, thank you so much for your feedback.
Contract for Difference is the full form of CFDs.
Liked the way of presentation of your article. Short and with lots of information. Was worth giving a quick read.
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We try to do our best and to provide you with the right information. Let us know if you have something to add. Good day.
hello dear this is good but i a question ?
how can made calendar for next year and how major events affect the market?
i mean to say that these effects cause increase or decrease in stocks price
Thanks for reaching out to us! Could you rephrase your question, please?
Thank you for the update. It is helpful
Hello Dear, thank you so much for your feedback.
Obrigado pelas orientações compartilhadas nessa leitura top.
Obrigada pelo seu tempo, colaboração e por estar conosco! Tenha um ótimo dia e bons negócios!
wow, I just started traiding 2 moths ago and I am learning a lot from your blog. thaks so much, please keep publishing valuable info like this one. I won´t miss any of them from now on…
Thanks so much for your kind feedback! Have a great day! Best trades!
Hi Tatyana
Thank you very much for the write up. It will certainly will help us to explore the wider market for future trade.
Wish you a very happy and prosperous 2021
Thank you for your kind words, Mohamed 🙂
Have a lovely New Year!
Help mi
mi
Hello! What exactly do you need help with?
Hi what happened to my money, i was busy trading and then i lost signal for one sec and the app closes all mtt trades and took my money,
Can you please refund me
Thank you for getting in touch. As you surely understand, your account and its trades cannot be reviewed from this page. We need you to get in touch with us on our official website so we can see the full picture. Kindly contact us at support@iqoption.com for further discussion. We’ll be looking forward to your reply at the specified email. Thank you for your patience and cooperation. We value the opportunity to work with you.