Turbulent Market, Traders Fasten your Seatbelt !

Since this financial crisis began the markets are experiencing sustained turbulence and volatility. While it never seems like it during the height of a panic, market conditions always revert back to some sort of normal. Volatility eventually settled and just be patience wait the markets returned from speculation condition to normal condition soon.

Avoid trade high risk investment if you don’t identify which risk-based trends are driving volatility. In chaotic markets like today, all roads lead back to liquidity. Whether we are talking about bond and equity investors afraid of bankruptcies or speculators shying away from unexpected volatility, it all has its roots in the ability to easily and quickly transfer capital into more liquid and relatively risk-free positions.

Do not trade too large and do not over trade. Overtrading was a problem that took traders a long time to overcome because they not know what they was looking for. Overtrading is a very serious problem, and veteran traders learn to avoid it. In fact, one way to know if a trader is a mature professional is to know if that trader conquered the problem of overtrading.

You must decide how much risk you’re willing to accept before you take a trade and you should not risk more than you can afford to lose. Proper risk management is always important when trading in the forex markets such as avoiding volatile currency pairs like GBP/JPY, since price action will likely become even choppier, prone to spikes, and could easily stop you out of your position.