What Currencies Should a Trader Focus on in a Low Volatility Market
The following is a discussion in the Global View Trading Club Trading Academy Q&A. It highlights the strength of the club, how it is , not to be modest, several steps above what you might normally see in a discussion venue and how it can appeal to traders of all levels of experience. Ket the foillowing discussion speak for itself
Member (club member)
Question – Product selection
In these times of low FX volatility, especially in the majors (EURUSD the main culprit) the system one uses is not as important as what products one focuses on.
Generally this is the problem many traders struggle with the most in the current environment. Knowing how to hunt is one thing, but knowing where the action will be is the first step, where do you hunt can be more important than what weapon you use.
Thanks
What Currencies Should a Trader Focus on in a Low Volatility Market
Belgrade Bobby (host of the Trading Club Trading Academy)
Your question is very interesting one .
I am going to give you how I treat this issue – so not an opinion or guide !
Being a midsummer and all, it is not uncommon to watch market behaving like grass growing…
In my strategy there are only four options :
– I prepare myself for longer waits and much longer hours in front of the screen
– I accept smaller profits ( like half of usual)
– I go with the smaller time frames
– I join the crowd and go to the beach
But I never go looking for some other pair/instrument.
To be able to achieve continuous profits, you have to live and breathe the instrument you want to trade.
Trying to get right some other pair that you find currently moving can bite you back.
Now i am not saying it is not possible to switch within pairs, but for that to be profitable you must have previously done homework, clear strategy, fixed R/R and Risk management , and that is not really possible to do seriously ad hoc.
There are significant differences between different pairs – from the spread, size of bars on any given time frame , all the way to possible slide both ways…so very difficult to apply exactly the same rules to different instruments.
They can also react on Data even opposite , but at least sometimes muted sometimes exaggerated.
In reality, you would need at least a week to prepare another pair strategy, until the move will be already done…and in the mean time your primary pair might just move again…
So I gave honestly how I deal with it – if you have any other ideas, please share it here with us…we might get to some other solutions.
What Currencies Should a Trader Focus on in a Low Volatility Market
GVI Forex (host of the Trading Club Common Sense Trading)
Let me add my thoughts.
Whereas I agree with specializing in one or two currencies where I differ is that you need to look at the full spectrum. What I mean is I look at
What currency is trading strongest
What currency is trading weakest
Whether two currencies are moving in opposite directions, which tells me there are real money cross flows driving these currencies.
This tells me what currencies I should be looking at in addition to what I specialize in.
I have a program called The Amazing Trader that can identify patterns no matter what the market condition. Now, to be clear, I am just relating what I use although it is available to club members at half price as a benefit of membership.
My intention is not to promote this program but to show how I use it to indicate if there is momentum (i.e. action) in any currency or instrument to trade.
What I do is look for patterns as seen in this EURUSD (5 minute) chart on whatever time frame I am focusing on.
When I see rising red (or falling blue) what I refer to as ladder lines, it tells me after a deeper dive that I should either be trading long or short in the direction of the lines.
There is a clear strategy that I will share with club members but the takeaway is this program works in any instrument that your broker offers on an MT4 platform, in all time frames and in all market conditions.
So one way to trade in lower volatility markets is to identify where the action is and trade what and when the market is trading.
What Currencies Should a Trader Focus on in a Low Volatility Market
Member (club member)
Thank you Jay & Bobby, I hope my question, and answer helps others as that was the main point of it. Bobby is right that you need to know the pair you are trading,…
Thank you Jay and Bobby for creating this place, I hope you get as much interest as it deserves.
Cheers
Belgrade Bobby
And that was one full explanation Alan 😀
We all have really different methods in trading , but the preparation, analysis and triggers are common – that cannot be avoided.
Just this early Europe, I did two trades on EURUSD , but I have someone trading with me as well – although a young blood , but promising one.
As I was nagging about grass growing, he went with GBPUSD – exactly same strategy, same trigger – and same result at the end J
That is all different ball game – it’s a team play….
Member (club member)
Thanks Bobby, yes so many ways to play it….And hard to do it totally alone…sometimes the sound of your own wheels drives you crazy (;-)’
What Currencies Should a Trader Focus on in a Low Volatility Market
Belgrade Bobby
We are not Gurus, nor influencers of any kind, but real traders with real knowledge and experiences.
I would like to see a good flow of ideas exchange here, both from experienced ones and newbie’s.
If questions are not asked, answers will never see the light of the day 😀
I am very glad to see that our breed is still out there, and that none of us is alone !
Leave a reply