trading11

Markets are an enigma, wouldn’t you say? It is difficult to trade and to look at the markets clearly, because they are always wrapped in the haze of news and different opinions. We have to follow all of them in order to have a full picture of the markets. But it is not always truthful, is it?

 

Very often in trading we have to rely on someone else’s opinion. That means that, virtually, we do not have our own opinion about the current situation. We always have to use opinion of experts due to their large experience and our lack of thereof. But is it fair? When we gain more and more experience we want to have our own voice and our own opinions.

 

The problem here is not even an abundance of experts. It is the fact that so many things influence the market, that we simply need another set of eyes to look at them. We need help to look through all of the bad information, all of the troublescaused by Central Banks and world politicians. And that can be very difficult if only because all of them are intertwined with each other.

 

Politics and economy and very tightly tied together. That means that both of them can be used to pressure each other. Trade war between China and USA is a perfect example for this statement – USA used economic measure to pressure China and China used economically proportionate answers to hurt USA as well. That is exactly why we needed the deal to be signed: when two giants like that are starting to fight, everyone is going to be hurt.

 

And surely, while trade war was raging, the markets for sure felt the entirety of the effect. We saw USD fall and Chinese yuan get weaker. We saw national indices of both countries get weaker and we saw the connections between the two. Right now we can’t deny – trade war hurt all of us.

 

The same is with oil. Political motives and embargo on the output can subsequently hurt economies of the countries tied to the same oil.  

 

You see? That is exactly why looking at the markets straight can be challenging. But, I think that the next several measures that you can take might help you in this difficult process.

 

1. Always get information from different sources in order to be able to look at the situation from different angles.

2. Look for the source of the problems.

3. Try and understand what the current situation is going to change in the long run.

4. Do not panic.

5. Understand that you can’t change the situation under any circumstance.

6. Avoid trading in the most turbulent of times.

 

These several easy steps will help you look at the markets more clearly, understand the course and possible consequence might help you eliminate the element of panic in your trading. But, when the situation gets so bad, that you can’t help but start worrying, it is better to stop trading altogether, at least until the changes are through and the picture seems more clear to you.

 

Markets are difficult to understand, but when you do, they are simply beautiful and very interesting.