Volatile market conditions is a market that has no particular direction but has very large swings and reversals. Traders look to take advantage of break-outs and large spikes. Unlike price which can sometimes trend for far longer than most market participants expect, volatility tends to be mean reverting. As sure as day follows night, very quiet non-volatile periods in the market are followed by sudden bursts of activity and large price movement. Conversely after a prolonged trend move prices open consolidate and spend a substantial amount of time channeling in a tight range as market players adjust to new price levels.
When does this system do well and when will it not?
The M-T volatility trader waits for the intraday volatility to decrease by a significant level. When the volatility signal comes, the volatility trader will be ready to get long or short. This strategy is particularly successfull when the market have some good follow ups after an initial volatility breakout. The strategy suffers losses when the market stays in a range after the volatility goes back to its mean. Trades are held from a couple of hours to a couple of days.
How are signals generated?
If the high from the previous period is higher than the current high and if the low from the previous period is lower than the current low, there is an inside bar. If you have 2 inside bars, the trade set-up is ready. The volatility trader will buy the breakout of the high or the breakout of the low. A trailing stop will then follow the market. The portfolio automatically assesses market conditions every hour.
Is the medium-term volatility portfolio for me?
The M-T volatility trader will actively monitor the market in order take advantage of trading opportunities. The M-T volatility trader should have an active risk management plan in place.
| 8 Model Portfolios to choose from Trend, Range-Bound, Volatility, and Swing Traders! |
| |
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
| |
Risk Disclosure: Trading in foreign exchange and futures is speculative and may involve the loss of principal; therefore, funds placed under management should be risk capital funds that if lost will not significantly affect one’s personal financial well being. This is not a solicitation to invest and you should carefully consider your financial situation as to the suitability to your situation prior to making any investment or entering into any transaction.
The trading systems herein described have been developed for sophisticated traders who fully understand the nature and the scope of the risks that are associated with forex trading. Should you decide to trade any or all of these systems' signals, it is your decision.
No representation is being made that following a system's suggested signals will necessarily lead to profit. Investors may incur into a series of consecutive losses and substantial equity-draw-downs that can deplete their funds before the occurrence of any meaningful profit accumulation. |
| |
