Quick random question. As I dive deeper and deeper trying to absorb all that is fx trading, I sometimes come across chatter regarding how the fx market volatility has majorly dried up as of late. Since you’ve been at this for a while, do you have any insight or opinion to this? Just wondering how, if it is true, it may effect our captures of the 3 large vol explosion moves.
It depends on what the beliefs of the author of the article or piece of information you are looking at. Everyone defines things differently. If you want you can link me articles that you need explaining on.
Everyone interprets things differently. Some people will claim that there is low market vol if the market enters a consolidation phase for a week or two. Other people will claim low vol market conditions if the market has been choppy the past 2-3 days. Other people claim low market vol if the market is not making 1,000 pip moves. Other people claim low market vol if the market is not making 3,000 pip moves. Other people will claim low market vol only if the market hasn’t moved more than 5% within a year.
So you kind of need a reference point since there are so many different ways of interpreting things.
That is what I do when I interpret information about someone claiming that fx market vol has dried up, etc. I like to try to get into their minds to see what they exactly mean by that. Then I like to compare it to my market beliefs and philosophy as spelled out in the mastery course.
I like to view the reasons why they think the fx market vol has dried up. What is their explanation for it? What expectations are attached to their analysis? What scenario do they think is causing or has caused the low market vol? That is what I am more interested it. I am more interested in the reasons why someone thinks so. Then I can take those reasons and compare it to my daily habits, to my market philosophy, to my scenario sheets, etc and see if what they say is true or not.
There are many times that when you read a piece of information or a book or article, or anything else, you want to make a decision about whether it is true or not, and if so, how much is true? Partially true? Only a portion of it is true? Why is it true or false? What underlying principles are causing it to be true or false?
There have been thousands of occasions over the years where I read something, and I said – SPOT ON! It’s true! And I added that information to my trading principles and philosophy to follow and remember. Then there were also thousands of other occasions where I read something and I said WRONG! It’s false! Then I made sure to discard that piece of information.
I have been through interpreting so much information flow from the trading forums when I first started, to all the junk in my email box, to so many different articles, books, etc. And I have come to the conclusion that there are a lot of misinformed people out there. There is really a lot of horrible, evil information out there that if you consume it and focus on it too much, it can throw you off your trading success journey for months or years. There are plenty of these landmines in the trading journey. I suffered through it for at least 2 years or so with the technical indicator and chart pattern rat race and forex robots. Somehow I was able to escape that and forge a stronger path. Although I still see some of my friends who are stuck in the same old rat race and flawed market thinking for 7+ years now, with no sign that they will ever learn. The really funny thing is that they still send me emails from time to time about some hot new analyst or forex robot or technical indicator that I should try. You really have to discipline yourself to focus on the information that matters and discard most of the other things.
The 3 large vol explosion moves that I have spelled out in the course – the ODVE, MDMM, and GM moves along with the easy money vs difficult money are a very powerful mindset. I take it for granted now because I have ingrained it into my subconscious and market thinking. I think it is easy having such a philosophy now.
But it was not always easy.
I struggled for months in the stop hunting and option barrier cycle. In order to develop my volatility mindset and classify the markets movements into the ODVE, MDMM, GM etc and all the other principles, it took several more years for me to figure such things out. So getting to easy, wasn’t easy for me. But now I hope to have explained the volatility mindset for you and other members in an easy to understand way.
In my opinion, most people do not have the volatility mindset of the ODVE, MDMM and GM moves. In the conversations I have with family and friends and other people, you can tell in the way they think and talk about the market that they do not know how to analyze and harness the market volatility, even if it is staring them in the face. They just have not progressed to that level yet. They have not discovered and developed the right market beliefs. I used to be in that state of confusion as well – until I spent 2-3 years to developed my global macro volatility thinking and principles.
Other people may have a vague idea of the volatility thinking that is shown in the mastery course, but perhaps they can’t express it in an easy to understand way.
To summarize, I love to focus on my own daily habits, my own reasons for why the market will either stay choppy or go volatile. I love focusing on my own vision and trading. Then I can compare my market hypothesis / scenarios with what occurs in the market and I can see if I was right or wrong and whether I need to correct anything. I focused on my own personal development to establish a powerful market philosophy. Then, when that came, everything became much easier, for I was trading with the universal principles that make up the markets.