Markets and your mind don’t like uncertainty. Looking for the next move and building one’s trading around such expectations comes naturally to us.
Holiday periods are notorious for sudden unexpected moves. Thin volume makes it easy to move the markets. The need for traders to know is often tantamount to success. The proverbial cloud of unknowing is a killer of many a good strategy.
When markets enter into prolonged ranges many a hard earned profit is given back within a few weeks. This could be avoided quite easily.
Energy doesn’t like to stand still. It needs to move. Ranging markets are invariably followed by increasing volatility. Traders need to understand about the rhythm of the markets, and of life for that matter, as this knowledge curbs impatience and impulse related trading.
Many intra day traders tend to focus on just one market.
They believe that getting to know just one market very well will save them from many a peril. I tend to differ. While certainly you should get to know just one market very well when starting out to trade, with experience you will be able to attune to more than one market quite easily. Each market has its own rhythm and its own cycle.
Opportunity is always round the corner, alas you must be vigilant and open minded.
Personally I like to keep my options open and prefer to trade several markets, even intra day:
I have talked about crude last week: Right now crude and its associated ETFs are looking more promising for a tradable move that will last for a little while at least. Particularly the ETFs OIL and USO are looking promising,
Trading a market that has already had a big move, or is on the verge of a break out is high risk and not very rewarding from a psychological point of view.
Always remember that it is the preservation of your psychological capital that is the most important part of trading. Without your psychological capital you have no capital to trade! Trade when you feel comfortable. There is no merit in trading just for the sake of it. Pushing your comfort levels to the utmost limits is not a good trading strategy. Instead hone your knowledge of yourself. Know what makes you uncertain about a trade and develop the discipline to honour those feelings.
Intuition is a much underrated trading skill and more important than your expectation of where the market is going to go next.
