Don't overthink it
As I head away to Paris for a short break with my daughters, including a couple of days at EuroDisney, we can all perhaps learn a bit from that wise old bear Baloo in Jungle Book
There’s a saying in sales of KISS ( Keep It Simple Stupid) and there is every reason to follow that mantra in trading the forex market. We can all load ourselves up with signal programmes, charts stetching back from nano-seconds to 20+years, and all the latest gizmos but there’s nothing quite like learning to understand price action and the very basics of what makes this market tick.
It’s all about flows and the recent drying up of any degree of volatility or extensive price movement coinciding with the ongoing investigations into the workings of our market are inextricably linked as I’ve said before.
Traders taking a punt on a whim (or otherwise) such as I did back in the day are now few and far between as bank treasury chiefs run scared from incurring the wrath of the authorities and not knowing what changes lay ahead in this “non-essential” area of the banking sector.
Many of our readers have vilified interbank traders for testing/”stop hunting” one side of the price or other but now those same readers are berating the lack of movement and volatility. Be careful what you wish for.
When all’s said and done these markets are with us to stay for a while yet, if not forever, and we have to adjust accordingly. To a jobber like me that’s not so difficult but to the longer term traders you are going to need patience in bucketloads and/or re-set your parameters.
And jobbers have to also be careful about not getting complacent about these tight ranges, and then ramp up position size regardless. As you’re equally as likely to get burnt without proper discipline and risk management. Trading in a 20 pip range that then moves 50 and stays there for eons can be just as dangerous as a continual 100-200 pip swing session.
But at whatever end of the trading term spectrum you wish to be you’ll be well advised to trim your expectations and strategies down to the bare essentials. Don’t over cook your analysis or think too hard.
I shall pop by this w-e to post anything of note in my time zone and then be back here with you next Friday. I wish you all successful trading and make sure you find time to turn your screens off. Mine most definitely will be as of the next 10 minutes!
Over to you Baloo