TL;DR: There is some money to be made over the last 10 weeks of the year if you’re prudent. For your Q4 2025 trading strategy, continue to follow your own trading rules while paying extra attention to volatility and seasonal trends.
Don’t look now but 2026 is just around the corner. The stock market is up double digits this year. Do you want to hold onto those gains, or maybe improve your results?
A Q4 2025 trading strategy to close out the year strong
No matter how well you’ve done during the 2025 bull market, you are faced with a choice: Continue with the same trading strategy or press harder for even better returns. Here are my tips:
Don’t get cocky and break your trading rules
When you’re having a stellar year, don’t let your success get to your head. Let’s say you bank a big winner by breaking one or two of your own trading rules. This can take many forms, but the most common risk management rule traders break is holding out for bigger profits.
You may feel emboldened to do that again for another trade that is proving to be a winner. “It worked once, why not try it again?” This is a slippery slope that can easily lead to massive losses.
Also keep in mind that the markets tend to have wild and erratic price moves during Q4. Book those gains when you have them, or you might find yourself digging a hole.
Finally, don’t force a trade. Only place trades that meet your benchmarks for risk and probability. Another opportunity will present itself. Be patient.
A consistent strategy in which you follow your rules always wins out in the long run.
Remember that seasonal trends are not a guarantee
Seasonal trends are historically bullish for the fourth quarter. And when the stock market is up for the first nine months of the year (like it is this year – aside from April), the market is often higher during last three months of the year.
BUT, it does not always work out that way.
This is not the time to be complacent. Watch chart patterns, and if they start to break, make adjustments to your trading strategy as necessary. Don’t try to make excuses like, “Oh, but this is probably just a blip and the bullish action will continue.” Stay flexible and keep an open mind, just like any other time of the year.
Our Q4 trading strategy at Explosive Options
The Explosive Options swing trading service has racked up remarkable gains of 51% so far. I have decided to slow things down as we move towards the end of the year. That means:
- Trading even less of our portfolio than normal (down to a max of 1%)
- Keeping my eyes peeled for new high-probability opportunities
- Taking winners faster than usual
The new year will come soon enough. Why mess with a great year’s performance?
