Volatility friend or foe?
Volatile markets can be like rollercoasters, one minute the price is here, then it’s there, then it’s back to where it started.
There are two prevailing views on volatility, one is that it’s great because it creates opportunity and the other one that it’s a nightmare because a volatile market means more potential losses, which one is true?
I’m going to give you the first shot of an opinion. I’ve added a poll onto the main blog page where you can vote which you feels applies to you. A few people have found the poll already. People who have been tutored by me should already know the answer.
When the poll has had a fair run, I’ll give you some of my views. I promise not to be influenced by the poll results!
Category: General, Trading strategies
Has the Volatility poll had a fair run?
I think I have a fair idea of what your comments will be once you post them, but recently I came across a situation where I felt Volatility was definitely a foe.
And that is in an Ill-liquid market.
If you’re on the wrong side of the trade then exiting becomes a nightmare in an ill-liquid market because you would push it further against you as you try to force the exit.
But, even if you were on the right side of the trade, it is unlikely you will be able to exit without giving away some of the profit potential.
Also, I remember there was another poll on ‘What is Liquidity’? Has that poll had a fair run?
Is has had a fair run and I forgot to follow up, I’ll see if I can find some time to do so soon.
absolutely hate the volatile markets but I shouldn’t, the reason for this is because I just cannot see a theme for these type of markets like I can the more stable ones, it seems to me that the volatile type of markets are becoming more & more common, I’d like to embrace them & get involved with confidence but just cannot get any joy, if you could back to me on this I’d appreciate it?