hello...just wondering if anyone can just make an educated guess based on experience / past market conditions...how long would these extreme volatile conditions last...until the fed meeting or until a rate cut or after a potential big drop or a bounce up some time this week or much later?
Expect wild swings, gaps and whipsaws to prevail until February at the very least. Today's rate-cut was expected by every veteran trader... how the market will respond is unknown to all, but it will be wild.
Study and paper trade these moves. Best way to learn is under extreme conditions with no risk to hopefully train you how to do it better when things quiet down a bit.
yea i figured it will be wild, but how wild can it get? like the 1st two weeks of 2008 or like the last week and today? its hard to imagine conditions like last week lasting too long, but its possible i suppose. and thanx for the reply austin. i think i will just watch or possibly trade the pre-market as long as i have to, until the market calms down a bit.
=============== Samuelg; Probably later, most of the year,perhaps years; bear markets are like that.Thank God i learned to trade before i traded index futures. Underlying stocks can be somewhat smoother; but Feb2007 splke down was a hint of these waves.Not a prediction, simply probibilities. Hope this helps,helped me.
oh yes...i been observing. but i am not changing my system / strategies based on these conditions, because i think that as soon as i adapt to this volatility - it will just drop and i suddenly find myself not being able to trade in sideways markets! (its confusing and difficult for someone new to quickly adapt to different conditions - it takes time and by then half the account is probably gone)
The problem for a novice or any trader is in this type of market you must use fairly wide stops to handle the big whips. You can make a killing because the moves are so big but that comes with risk. So either trade small size or paper trade until you understand the risk.
paper trade - IB lost quotes for extended periods, there were limit down in place overnight. Definitely not a place for novices.
oh no...i am not a complete novice - i been trading for almost 5 months (its not a lot, but i have been more efficient in learning, i think so at least), i think i can handle the volatility we saw in november or the first two weeks of 2008, but just not the volatility we saw last week and possible today. but yes i should take the advice, i am going to make myself confined to just trading the pre-market for now.
Just papertrade this environment if you're new to it. If you're a scalper, try to record some days tick by tick. You can then replay it for future training. Good luck.