I’ve been noticing much volume these past few days. Usually when I trade in the evenings, it’s a constant 5 pips sideways motion. This evening has been out of control.
I thought I would scroll back a few years on a couple of the majors, and I noticed that even just two years ago, the volumes are not what they are today. Like in 2005 - 2006, I see entire weeks go by where daily movement is barely 10 pips. If you where making a living trading currencies then you run into that… talk about a change in strategy!
Are the volumes now attributed to more brokers and better marketing, or is it just the nature of the market to slow down to nothing every so often?
Did you miss the memo on the global financial crisis? Because that is having a significant impact on currencies and the volatility in the FX. Also, overnight interest rates aka rollover, are quite wacky at the moment. One day I’ll profit from the rollover, and next day I’ll lose money, even though the central bank interest rates haven’t moved.
I didn’t miss the crisis, I was just looking at past data and noticing some real lulls. If currencies moved less than 10 pips a day, trading off a mini or micro account wouldn’t be worth the trouble.
I’m looking at the daily charts of all the majors and everything seems perfectly tradable in 2005-2006 and just as much so back into the late 1990s. Which is basically as long as the retail forex market has existed.
Well it is easier right now, whether it will remain that way is totally uncertain and i would suggest it won’t.
For example the G/J basically free fell 2500+ points over the last week (4500+ over the last 2 weeks), without retrace almost (or at least not 1 of any significance), then rebounded 1000+ pips today. So that is some crazy volatility, this maybe a once in a lifetime trading condition and it is due to the financial crisis around the world.
I’m just trading the G/J right now with an occasional G/U trade, and it has been insane this last two weeks, I dont even want to go to bed, cause I might miss another great trade opportunity… haha
Only currency i wouldnt be trading is the U/J - its just not right.
I would expect this kinda of action for the short term, but eventually it will revert to calmer trading activity.
Though with the increase in volatility, you could say it is harder, as you will get taken out faster and more often, if you are on the wrong side of the trade.
Oh and a second though is that, not so long ago, the average joe (you and me) couldn’t trade the FX market, I think in and around 1996 or so the retail FX market began.
So you have to wonder just how accurate is the data from your broker as they probably didnt exist then either.
