Not necessarily, it depends on the kind of volatility.
The volatility that we saw on the Forex market about one or two months ago (triggered by the debt crisis on Greece and other European countries) wasn’t good for us. Regardless of the type of trader you are, its difficult to profit from the market when it goes up and down like a rollercoaster, with wild swing and giving no prior notice about when the market is going to turn around, it just did without prior notice. During these market conditions we need to be careful, be sure to manage our risk and trades effectively.
What about the volatility in the last two weeks? That’s the volatility we need to profit from, the market still goes up and down, but with clearer moves, it reacts to important support and resistance levels and that’s what makes this type of volatility tradable. When we know what the market is likely to do in the following hours/days we just need to find the timing, the right moment to enter our trades. It looks like if the market is just waiting for any reason (poor numbers (or good ones) on fundamental releases, debt rating downgrade, etc for the market to move on one direction, but on this kind of volatility we know where the market is likely to head.
So if you have the opportunity to trade during these days do it.
Don’t forget that the interest rate announcement is released later today!
Yesterday I wrote an article about Risk, leverage and realistic returs… Its a pretty good read:
Let me know what you thought about it!
I don’t know if you noticed the market didn’t go anywhere in the last Non-farm payrolls report (at least on most currency pairs). The market just moved sideways, with wild swings, making us believe the market was going move on one direction, and suddenly, it stopped and retraced back. This is the story of must currency pairs.
Unfortunately, I got caught in a few trades like this in the last two weeks. There is nothing to worry about, because we use a pretty tight money management technique, still it is important to point it out…
What we need to learn from this, is that, sometimes the market doesn’t want to be traded and we all need to have the clarity and objectivity to determine it.
We all get biases, some because they saw a forecast from another trader, others because they get inpatient about the market conditions and just want to trade, etc. But remember we don’t have to trade if the market conditions are not suitable for trading; staying out of the market is a trade decision, because we are not risking capital that could be at risk if we entered the market.
If we don’t find enough reasons to believe the market will continue in the intended direction, the best thing to do is forget about trading that particular currency pair and move on to the next one, if we end up with no clear market conditions on any pair, call it a day! And start all over again the next day, until you find the right market conditions to trade. That simple! We need to be patient!
Our job as traders is not trade every single day… Our job as traders is to make consistent profits trading the market, and we’ll only be able to get consistent results when the time is right to trade.
Have a great weekend you all!
Next Monday we are about to start a new course, we have recently changed the course structure to your benefit… it includes: trade recomendations, lifetime access to webinars and videos, permanent support and more… if you are interested please follow this link:
Please contact me at firstname.lastname@example.org if you have questions.
The structure of our courses has been changed, we now offer more benefits including ssending you all our trades to your mobile device. Please go to the next link to know more about our new training program:
Feel free to comment if you have any question…
Earlier this morning I was talking to a friend (who is outside of the trading world), she asked me what was the most difficult thing about Forex? I say, well, there are many things: you need to use a well developed system, risk and trade management, money management, you need to be discipline and patient, mentally fit, etc… Then she said: “No, what is THE most difficult think about trading? Name one”.
She got me to think about it, and it wasn’t until 3 or 4 hours later that I got the answer to that question:
The fact that you are never in control over the market
You can do everything right, follow all your rules, enter when you are supposed to enter, set your SL and TP orders at the right place, and still the market could go against you.
When doing everything right in other areas of life, 95% of the times you’d get exactly what you expected, but that’s not true in the trading world, be it Forex, options, stocks, etc.
But we have to learn to live with that (because there is nothing we can do about it). One of the things that helps me deal with this is that I don’t relate the outcome of one particular trade (positive or negative) with the way I trade. That is, I do things right when I follow the system (even if the the market goes against me and hits my SL), and I do things wrong when I don’t follow the system (even if the result of the trade is positive).
I know that if in the long term I follow my system, my chances of success are greater.
Just wanted to let you know that you will be able to save on our courses on December:
10% off in the SF Intensive and 5% off in the SF Advanced
You will be given access to the whole course material during December and the live trading sessions will start the 4th and 11th of January.
For more information please email me at email@example.com