5.11 - looking for a new trading strategy

Markets behavior makes us look for a new trading strategy

With the beginning of a new trading week and trading month we can only pray for the future trading not to be as shaky as it was just a couple of weeks ago. Only in the span of the last three weeks we have lived through prices drop, oil sliding by as much as 16 percent, two international selloffs and dollar getting on the rollercoaster. We have endured bear market for several days as well as fears that the bears were her to stay.

And all of these changes have really caused a lot of to think what to do next and what trading strategy to choose. but the thing here is that we only can think about the new trading strategies when the market is relatively calm. Not when it is changing five times a day.

Times like that are always extremely dangerous as they usually plunge us into thinking about the future of our trading and most of the time it results in massive selloffs are traders are giving into panic and fear. But as we know that is really not the way. Especially right now, when the markets need our help in order to stay afloat. And we are not only talking about the safe havens of trading here. No. right now we have to be brave enough to think about longing assets like oil and pound – those losing at the moment.

We have to think – why are they losing? Well, most of the time nowadays assets are down because of the strong dollar and international policies of the United States. But this week can really change the whole situation pretty hard. Do you know why? Because this week the whole world will freeze expecting the midterm elections in the United States. A lot depends on the outcome of the election. Including international economy.

And we are really hopeful for the positive outcome. Why? Well, we cannot say for sure but it seems that Donald Trump and his party managed to anger a lot of people across the United States. And a lot of his supporters stayed with him, that is true, but a lot of people turned away as well. That is why we think that Donald Trump along with the republican party do not have a sht. That is, of course, if the elections are not going to get rigged again [allegedly].

So. Back to the markets. What do we see right now? We would say a whole lot of nothing. Traders are getting tired of buy-sell-buy-sell dance. When the direction is changing several times a day there is no real possibility to enjoy the prosecco of trading. And with that a lot of traders are under a serious threat of getting tired of trading altogether. At least for the moment. And that is not good for the market. Losing much needed support is going to reflect on the markets pretty bad and will likely result in the selloff. And we are not sure that the system is strong enough to withstand a selloff at the moment.

With even the pros of the field struggling to give proper financial advice at the moment we know that we were really landed into serious financial troubles. It doesn’t seem that bears are ready to stay at the moment but bulls also seem to be out of breath. Can we wait for the situation to stabilize on its own? We don’t think so.

So, our point at this moment as is follows – if there is a time to develop or at least try and develop a new trading strategy it is now. Yes, we now that it is inconvenient and uncertain at the moment, but the recovery might be just around the corner. And we cannot afford to be taken by surprise at the moment. Right now we have to be ready for any further scenario.

 

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