Current market conditions

I have problems to trade in current market condition through finiancial crisis.
The market is really shakily.

What are your thoughts about the situation for forex traders in this time?

Hi Pierce,

It's true that market volatility has been steadily increasing since around August. Though I'm no expert, I've found that emphasizing a good deal of prudence helps yield fair results even when things are chaotic. When I say prudence, I mean waiting for ideal set ups before putting on a trade, passing on trades that don't have a simply great risk/reward ratios and focusing on protecting your winnings. Avoid anything that doesn't just scream "trade me." I've not put on a trade with more than 60 pips/lot risk in over two months and I've not done too badly. So adjusting your risk is something that helps. This way I can afford to be wrong a little more and it's certainly helped protect my equity though it's limited considerably the number of trades I'm able to make.

Another thing that might help you get your bearing is just browsing through the fundamentals in the news to try to understand why a currency pair is moving in a general direction. It helps me when I'm uncertain about the market. For example, from a fundamental standpoint, I'm fairly confident in certain currency trends like the EURUSD and GBPUSD to continue going in the direction that they're going because there's a strong fundamental reason for it. I continue to sell rallies because I think the unstable global financial markets increases demand for USD and until we see some stability, I conjecture that the trend won't reverse. I may be wrong, but, so far, putting a little extra thinking into my trading hasn't hurt me yet. When I can't rely on my indicators, I tend to fall back on what little sense I can salvage from my already overworked mind.

Some of my friends have preferred to sit out days where they expect a lot of volatility (election day this week for example). Maybe stay out of trends you don't understand. I completely avoided the retracement in GBPUSD 10/28-10/30 and waited for the downtrend to continue.

While it's not always easy to reason how the news affects currencies, it may help alleviate some of the fears you might have if you sort of have an idea why a pair is moving in a general direction.

I know this is very vague, but I hope I've been even marginally helpful.

Best of Luck,

Andy

Thanks for your great statemant.

You helped me a lot.