Hey, I've been trading for 6 months or so. Its been up and down so far. I keep reading about how the market changes as far as how to trade it. How so? Different technicals work best? I can imagine how vol changes, but thats not really what you guys mean right? thanks.
Hi rdm239, As traders when we see those words market conditions has changed it really could mean something different from one trader to the next. For me, when I use the phrase, I'm mainly talking about a change in volatility. I've seen more traders enter drawdown periods or find it more difficult to manage their trades when volatility changes in comparison to other things that may change in the market. Further, most traders are unable to recognize that the market has changed or don't care that it has changed. That in itself will complicate matters for those traders that enter a drawdown or began to have consistent problems in their trading. This will often lead them down the path of thinking its a problem with the entry signal and began tweaking (making changes), jumping to a new strategy as a form of resolution instead of doing it via thinking that adapting (adjusting) the entry signal things will improve. Instead of changing my entry signal when market conditions change... I prefer to change my exit strategy (not entry strategy), position size, trade expectations. Thus, you need to understand the market to see changes take place in the market as it is occurring instead of via hindsight analysis or when its too late (drawdown or worst). Mark (a.k.a. NihabaAshi) Japanese Candlestick term
Agree 100%. When volatility increases get more aggressive and vice versa. It takes awhile to develop these skills though so you're going to need to be patient with yourself. 6 months is a very short time in the learning how to trade process. Also try and think about what a market is doing & when volatility might occur instead of focusing on specific patterns or squiggly lines. Markets can basically do only two things - move sideways/congest or move directionally/trend. When is a trend (volatility) most likely to occur? How about when a market has just broken out out of a lengthy congestion period. There are other clues you'll pick up along the way too.