Having a quick glance at the markets during the holidays did make me feel a little concerned about what current market conditions may materialize into in the coming weeks ahead. Although a bumpy start can be expected, the high levels of volatility seem to be persisting creating a large degree of uncertainty lying around in the market.
I know from my trading journals that I sense frustration creeping in with lack of follow through in price movements. I have never experienced periods of volatility this long so each day is a new lesson to learn an unfamiliar trading environment and a chance to expand my progression through my trading journey.
I think back to when I first began and the naivety in my thoughts and ideas around trading, erroneously presuming that market conditions would stay constant, assuming that this would be the probable way my system would enable me to turn out a profit. Of course trial and error is the best teacher when it comes to trading. I realized quite soon that my myopic judgement on the market conditions were ill-devised.
A really great example of this is watching the seasons go by. I for one enjoy summer, to me there isn't any season more rewarding than warm days sitting next to the pool with meat of the braai (BBQ) and a few mates around to enjoy the afternoon. I wished it were like that everyday, but unfortunately the weather system has many variables which each play a part in determining the type of weather you will experience.
Firstly it can't be summer all the time because the world rotates around its axis, we are in constant motion floating in a universe which has balance to it. When the Northern Hemisphere is having winter the Southern Hemisphere has summer and vice versa. We have no control of the motion, we have to accept where it is placed within the universe.
Secondly you won't be dressed in your beach clothes in the middle of winter unless you're Lewis Pugh, the idea is pure insanity and you would literally freeze to death if you never found something to keep you warm. Then it makes sense why we dress up warmly in winter, to adapt so we can better survive.
The same goes for trading, our capability to notice the change in conditions and our degree of willingness to adapt to those condition will help ensure long term participation in the markets. This is where most new traders will get caught up in the headwinds. Without the right mindset you feel an abrupt change to the norm which you have become accustomed too which preemptively leads you into a trap of believing the market is working against you. You find that your system begins to show cracks which hadn't previously shown up, you begin to question yourself and your ability as a trader.
Some traders get frustrated and become aggressive and trade in bigger sizes to make up for the lack of performance yet you always find they come off second best. There is nothing, let me repeat nothing you can humanly possible do to change the condition of the market, you are merely one trader in a universe of many after the same goal; Survive and Thrive.
You can however control the way you behave in the market by adapting to the conditions. First time traders will never be shown these conditions until they've actually happened which is why it is imperative that proper risk management is employed so that the trader protects himself/herself from detrimental capital losses and thus have the available capital and mind set to operate in changing environments.
Presently the global markets feel as if they in between seasons, neither here nor there but one thing is for sure, once this period of transition has ended there will emerge a distinct direction once again, nothing stands still. The next few months are going to be critical and your level of alertness needs to be razor sharp.
If you would like to contact me you can through my email at cadetrader@gmail.com or if you wish to
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