Have markets become difficult to trade?

There’s a seemingly stale mood hanging around financial markets since Wednesday after the unexpected election of Donald Trump as the president-elect of the United States of America that caught most off guard and added yet another degree of complexity to an already complicated economic outlook.

Having avoided the event by sitting on the sidelines due to the volatile nature often associated with major political and economic outcomes, I’ve found my trading activity continues to be intimidated by the fear of uncertainty that’s extending it’s presence over financial markets as participants attempt to understand the good(or bad) fortunes that may be brought into the future.

Since the occurrence of the divisive “Brexit” vote which was held on the 23rd June 2016, markets around the world have had the shine with which they once offered handsome returns from, abruptly taken away as ordinary citizens send a stern message to politicians that complacency that’s wrought significant policy decisions will no longer being tolerated.

The first indications of a poor trading environment happened when markets found stability sometime during August when a handful of opportunities exhibited themselves with all the hallmarks of a high probability setup.

From this analysis I decided to seek out setups that possessed the highest possible chance of succeeding which was influenced by the lack of direction and poor performance of markets during the year. My thought process stemmed from the idea that by selectively choosing the best setups to trade might aid my efforts to a decent return that had escaped me this year.

But the failure of every single trade I put on whilst spending a considerable amount of time finding them was enough for me to conclude that the difficulty in picking the right trade was substantially higher than it had been in prior years and thus necessary for me to taper off my trading activity until some traction in either a upward or downward trend can be found.

In saying this my strategy will be paying close attention to multi-year highs and lows of major world indices so as to gauge direction, most particularly when price nears them with a focus on a convincing break up or down as this could possibly indicate a break out of the motionless sideway range but more importantly a shift towards trendiness.

The absence of trendiness as a feature in markets has meant most traders have found it hard to churn out a profit in the last year let alone the last month. The fact that it’s occurred more frequently in recent times does suggest many may have taken the hint and opted to watch proceedings without taking part and in essences saving themselves from ruining their account.

If I’m going to be confident in the markets ability to find a direction, I’ll need to see a strong indication that exposure is being taken up and participation flowing freely again. Until then I’m treading cautiously and patiently in the hope that the uncertainty clears up and we’re able to see conviction in the movements of markets.