Home > Lessons from the trading floor > Trading in the Dog days of Summer…

Trading in the Dog days of Summer…

Are you trying to keep busy as we plow through the dog days of summer? You are not alone. As it turns out we have been very fortunate this year in term of intra day volume and volatility. Up until this week, the last week of August, the summer has been full of news that has resulted in above average volume, and more often than not 2 or 3 intra day trends with follow through. It now seems like we are starting to hit a wall in term of volume. So what to do?


The important part is not to jump in and out of trades just for the sake of trading; small losses will turn into big losses, since for the most part it will feel like nothing is going on, yet you will be bleeding slowly. Have a couple of slow bleeders and you end the month on a negative note.


Keep yourself occupied. Review your trades over the last month. Review your ECN fees. Looks for ways to improve your trading by reviewing the last couple of months, that way when the market pick up, YOU will be ready.

Things you can do:

1-     Make sure when you review your trades you use hindsight to evaluate whether you followed your plan or not.

2-     Check to make sure you are being efficient in routing your orders

a.       Are you getting rebates when you need to?

b.      Are you paying to remove liquidity when you didn’t need to?

3-     Check your ECN fees

a.       Make sure they haven’t changed.

b.      Sometime ECNs change their fee structures.


I give these pointers because that is exactly what I am doing this week. When I see myself short M and less than 1mm shares have traded by 10.30am you check yourself and wonder why take a position when the volume is so low. The probability of a nice orderly follow through trade is much lower than when you have volume. The risk reward is not worth it.


Enjoy and get ready for September when the market traditionally comes back to life.



  1. Kat
    August 26, 2008 at 8:16 pm

    Great advice, thanks.

    I’m definitely over-trading this week. Time to step away.

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