BLANTERWISDOM101

Forex Trading Tricks When Volatile Market

Monday, January 21, 2019


When you enter the market, you will be faced with conditions that sometimes do not match your expectations. When you expect the market to be volatile, in fact the market instead stays in place (Sideways). When you expect the market to sideways, it actually moves volatile.

Volatile market conditions are usually preferred by traders because they promise big profits. However, the actual potential loss is no less great, especially if the trader does not prepare well. In order to be able to profit on the market like this requires a change in strategy and special trading tricks.

Trading when Volatile

1. Avoid the Temptation of Adding Lot to the Volatile Market

Usually, traders who want to take advantage of volatile market conditions and are tempted to profit greatly increase the number of lots or frequency of trading. This temptation should be avoided. Even though it can be big profit, the potential loss is also big. Before placing an order, consider risk / reward according to your mental and financial abilities first.

Just sharing, on a volatile market, losses can be very sadistic. Therefore, consider reducing the number of lots. Or, avoid using margins that are too large. Using a smaller number of lots also has the advantage, namely you can put a more loose Stop Loss level in anticipation of a wider swing price.

2. Discipline in the System

During trading in volatile market conditions, traders must be more disciplined in the system used. Comply with sell or buy signals, whatever happens. This will help when price movements go wild. Without such strict discipline, the possibility of a loss trading account is very large.

Many traders do not want to put up a Stop Loss because they see prices move up and down, so that prices are expected to move back to the original level. This is something that should not happen. Traders should be more diligent in putting up Stop Loss. When the market is volatile, every time Support and Resistance is broken, the price will move faster. That is a greater potential loss. That is why we need to be more diligent in putting up Stop Loss, not vice versa.

On the other hand, traders must also be prepared for all possibilities. In volatile markets, panic, greed and fear are mixed together. Every time there is fundamental news, which is often underestimated in the normal market, it can be a panic-selling or panic-buying trigger. Try trading in a shorter period of time if necessary. After the market returns to normal, you can trade again in the longer term.

3. Focus on Chart

When volatile markets, many technical indicators can be unreliable, especially trend-based ones. Because the trend is going wild, briefly looks bullish and briefly looks bearish. For this reason, it is necessary to be careful in interpreting Technical Analysis.

The solution, focus on the chart. Too much listening to the confusing news, briefly bullish, briefly then bearish, it will even add to the stress burden on your head. By focusing on the chart, you will be more calm in trading, nor do you need to bother predicting where to go. On volatile markets, prices will move favorably. All we need is anticipation. So, traders simply focus on the chart.

Generally, it is difficult to make a profit in a market that is not predictable. Therefore, if your position experiences loss, you don't need to be discouraged. Many other traders are in the same boat. Calm down. If necessary, rest first from trading. Then come back again when the mind is calm, or wait for some time and return to trading when the market movements tend to be normal again.

Share This :