Discussion in 'Trading' started by Nexen, Jun 27, 2009.
In your opinion, why do traders seek volatility ?
let's take an extreme case when a stock is totally flat day after day after day. in this case there is no opportunity to make money because some change in price needs to occur or needs to be expected to occur.
On the other hand consolidation marks clear support and resistance, making it quite easy to define entries and exits.
If their using a volatility base strategy or they have done statistical work on their method to discover it performs when volatility is rising...
More volatility the more trade opportunities and more follow through to profit targets.
Change causes volatility, no matter if it comes from good or bad. These last couple of years saw terrific intraday swings caused by none other than the blowup of the fat cats themselves. Now the mkts are focused on what comes next along with its strength, or sic................lack of strength.
The fat cats are not trying to correct the problems that caused the blowup, that is very clear. They are trying to preserve their own ball park itself. Who is being protected and for what reason is the question that needs to be asked. Well, i think we all know the answer to that.
http://snuffysmithsblog.blogspot.com/2009/06/wall-streets-toxic-message-by-joseph_15.html (click on wall streets toxic message for ther pdf file to read the whole artical
Thanks hog. Interesting Sat morning read. I read VF regularly but hadn't seen the Stiglitz article yet. One thing is certain, the nature of Wall Street is such that it will be incapable of cleaning up its act on its own.
Separate names with a comma.