Continuing from my previous blog, how did I fair in the market as a trader today, after the market has adopted to the tight spreads and no commission trading environment? I made money, that is my humble answer. Is it a lot? Is it that simple? Some may ask, but the answer is no. It was never easy.
Simply, what is the difference between trading on the current environment versus an environment that requires you to make back wide spreads and huge commissions from the market? Well, in my opinion, the difference is just that other than being able to allow you to exit at a price that could end you up with lesser losses, if not it will end you up with a small profit. But if you relook at it again, do you think the market has also became less trendy over the years?
If time allow, it would be excellent if you could take a close look at the Average Daily Range data on some of your favourite currency pair that you trade on frequently. You will discover that right after when trading became more electronic and as trading commissions begun to slide, markets have also begun to stay in ranges more than it trends.
Looking closer again, with all the technological innovations and the ease of access to data, market participants are now more able to react to announcements and news than they used to be 10 years ago. So if you observe your charts closely, you will discover that the markets are trading sideways more frequently than they were trending.
So in order for ourselves to be successful in trading, what is the most appropriate approach for us to adopt?
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