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Extreme volatility

Whilst volatility is necessary in trading there are issues with extreme volatility that traders need to consider. The clickable chart below shows one example of extreme volatility with Copper (CUUUSD). The size of a reasonable stop-loss which is related strongly to account size, is a limiting factor. If your account is say £2000 how much of a hit can you take in one trade like this? Not much. You’d be depending on luck to jumpRead More

Disentangling currency pairs

Many a new trader will find listen to the news about which currency is doing well or badly. For example the news might say that the US Dollar strengthened, or something like that. Most of these news reports do not say how they know what they are reporting. Traders would normally be setting their brains against currency pairs e.g. USDJPY, or GBPUSD and so on. This is a ratio of one currency to the other.Read More

The nature of expectation in financial trading

On several occasions I’ve referred to ‘expectation‘ as against ‘prediction‘. I can expect a delivery of a package at my home this morning (for example) but that does not mean I know it is going to arrive for certain ‘this morning’ or that I predict that it will. ‘Expectation’ means a reasoned position/opinion based in information I might have or inferences I may make based on a range of things. How is expectation important inRead More

Better than a million minds

Are you better than a million minds? The chart below shows the recent extreme volatility on Wall Street. Millions of minds are into this ‘game’ of stocks/shares. They all want one important thing: profit on their positions. We don’t know these people (obviously); how can we. Yes – their interests may be represented by brokers in the stock markets. Some of these folk are institutional investors – these are the ‘big boys’ with big financialRead More

Coping with volatility – the value of experience

This post continues from ‘Is volatility your friend?‘ The emphasis here is on copying with volatility. ‘Coping’ is a psychological thing. New traders will have emotions and it is no good denying this or avoiding it. The screencast below brings out what tends to happen with new traders when price moves in the ‘opposite’ direction (full screen view is best). There is no magic formula or advice on how to cope with volatility. This is whereRead More

Is volatility your friend?

Every trader knows that volatility is the thing that is necessary in order for the price to have movement. But there are different kinds of price movements. Some instruments move in fairly neat directions up, then retrace and move up again. We all love these. There are some others that are ‘all over the place’. The chart below shows a volatile situation on 15 min time frame. Degrees of volatility seen, depend a lot onRead More

Sterling causes excitement

Those who were watching Pound Sterling, would have seen some excitement recently. The Prime Minister, Theresa May, called a snap election on 8th June 2017. This caused the fainthearted to dump GBP for about 15 – 30 minutes. Snipers knew this was just a short high breeze. Then GBP rose like a phoenix for the next few hours. The first screenshot shows that if you were positioned to catch the activity, you could have gainedRead More

Mind the gap

Gaps are traditionally taken by new traders and some gurus, to mean that price will continue on balance, in the direction of the gap. In financial trading that is only true some of the time. Even if it is true, say 55% of the time, what does it mean for new traders? Nothing! Why? Because the only issue in profitability is how a new trader controls their acceptable loss (aka stop loss). The chart ofRead More

Protected: What happened next with USDCAD

There is no excerpt because this is a protected post.


I’ve been stalking NZDCAD for some time. It is a most interesting and challenging currency pair. In August I was stalking NZDCAD for a short. At that time there was a weekly zone of resistance. Now here at the end of November, the picture has changed. Sound traders shift their mindsets as new information emerges. I’m long on NZDCAD, having contracted to lose a controlled amount (alias stop-loss). This means that I do not know whatRead More