Global Economic Crunch and Forex

Hello, everyone.
pls i'm really bothered about whether the global economic crunch would affect the volume of currencies traded on the foreign exchange market. I trade on the daily chart so i rely on big movements on the daily time frame to make money. And so far, i've not seen the kind of volume i saw in the forex market late last year.Or is it because this is still january?

David

Late last year was extraordinary. Volatility was unprecedented and immense as huge volumes of money migrated across the globe. At some point, for the good of civilisation, the markets should become less turbulent. When this might be is anyones guess.

However, volatility is a double-edged sword, potential rewards may be at least partially offset by an increase in potential risk if one does not manage their positions to factor in the increased volatility. In other words, your stop losses need to be larger, and therefore your positions sizes need to be reduced, at least if you want to be consistent and keep out of the trader graveyard. IMO it is easy to overstate the benefits of extreme volatility, but then it is easy to understate the benefits of not-so-extreme volatility too - stop losses can be reigned in and position sizes can be increased. It's all swings and roundabouts really.

Of greater importance is whether the markets are displaying a tendency to trend or range. If you are trading from the daily alone then things move from contraction to expansion much more slowly than on the intraday charts. The year has only just started really and price is taking a little breather after some remarkable moves. Have a bit of patience and think about methods that may capitalise on a ranging market or at least seek to catch a trend/breakout early and at limited risk.

Thank you very much for this comment, so i should not see it as part of the global credit crunch per se?

David