Because the illiquidity is mostly there due to many big players on the sidelines. They're on the sidelines because of the massive selling and lack of direction. The selling can't go on for much longer. It just can't. Not unless you believe it is possible for the Dow to go to zero and pairs like the AUD/JPY to go to 10 (I don't). If it continues like it is now, we'll get there in three weeks. So even if you believe those numbers are possible, it ends in a few weeks. Additionally, only so much money can be redeemed by customers of funds. When that exhausts, there's simply no one left to sell.
I agree - scalping is very, very difficult right now... I tried one scalp today on EURJPY and bailed on +2pips. I could have gotten 8pips tops on that trade... The risks are just enormous under the current conditions. It is better to save money by NOT trading right now. The US open has just shown that there is no direction - just choppiness right now - and it's all distrust of any trade, position or level - complete fear, I think. That makes any fear trigger quickly and constantly - leading to this immensely erratic market - illiquid as well. The dips are just brutal on the Euro... while scary close on the USDJPY.
Different strokes and some strategies thrive in this environment.....never say never! "One man's meat is another man's poison" There are many, many different strategies being traded profitably right now, just because conditions aren't suitable for your particular strategy doesn't mean everyone else is in the same boat, it's naiive to think they are in my opinion. Have a look at Eur/Aud, a great pair for scalping, a veritable flying machine..... Market conditions change, this volatility will probably end as liquidity increases but the market may not be the same as it was before, you may end up having to adapt, either that or quit.
Bingo! How long have various markets been called 'oversold'? How many analysts and traders have said this is crazy? But it still carries on, regardless....
Conditions are always changing in the markets - it is just the pace and little coherency to the current conditions that make it difficult now. I can go for 5-10 pip scalps, but that is very tiring... The risk is also the very strong backlash/retrace, once a wave has hit. That makes any strategy very risky. Unless one started shorting Euro last week... or going long Yen - and stayed short ⬠/ long ¥ during this week.
I'm glad to see that I'm not the only one who has decided to sit on the sidelines during this nonsense. Sure there have been some good moves in hindsight; but the large (and often sporadic) movement is too much for my fragile ego . I'm sure some of you are being showered in pips - congrats on the luck.
All strategies are risky all the time. Even arbitrage. Risk / reward. If your strategy cannot adapt on a dynamic basis to prevailing market conditions it is worthless. Instead of finding that out by taking losses, take the time to identify a strategy that will work in changing market conditions. Then, most importantly stick to it as you will be proven correct over time.
Difficult and incoherent for you perhaps, but not necessarily for everyone. Don't misunderstand me, there's nothing wrong with staying sidelined if you're unsure, in fact that's the wisest thing to do, but suggesting other people should also stay sidelined or that traders who do trade this market are somehow taking additional or reckless risks doesn't really make sense in my opinion. This hasn't got anything to do with anyone being a 'better' or 'worse' trader by the way, trading isn't a competition, it's just different traders perform differently in different market conditions. Some are comfortable adapting to their surroundings, others can't relax without their favorite pair of slippers