The Market Acts Like a Girl

The market acts like a girl… fickle minded. You just don’t know what she wants exactly. Here’s the situation: Think of the market as a girl, the US as the hotshot boyfriend, and you (the trader) as the “friend.”

There are times when the boyfriend does something stupid which turns her off. You, being the “friend,” live for those instances because the girl runs to you. Well, it’s obvious that you like to go and ride with the girl. However, there are situations when you think that your secret love would lean to you because of a crazy action that the bf did. On the contrary, she even loved the guy more. What? Yeah. The antics that you expect would give the guy negative points in fact have increased his charm.

It’s jaded. I know.

So what can you do? The answer is nothing really. You just need to be around and hope that she will turn back to her sweet “friend” again.

——-

Generally, bad US fundamentals weigh down on the USD (bad US = bad USD). Risk aversion from the US capitals markets causes a sell-off of the USD. This is logical. However, there were several instances in the recent past that this did not happen. The USD even jumped despite some dismal economic data from the US. Why? Some say that the market hedged their money in the USD away from the US capitals markets.

The point that I’m trying to make is that it is really hard to gauge where the market is going even if you have an idea regarding the economic outlook of the US (based on preliminary estimates). Sometimes, the market will sway just as you expect it to be. Sometimes it does not.

The difference between me and the “friend” in the real world setting is that I can make the girl favor me over the other guy 99 times over a 100 (sike!). I have a hand on the outcome.

However, I cannot do that in trading forex. I can only be a “friend.” I can only wait and be prepared for the market to come to me; to work on the opportunities being presented.

Sometimes I win. Sometimes I don’t. In the forex market, no matter how well positioned you are, it is still all up to her.

Comments

  1. Green Stickman says

    Do you have an idea on how big is the percentage risk when investing in Forex?
    Nice post by the way. Thanks! :)

  2. Ron Acoba says

    It depends on your risk profile. But I suggest not to risk more than 2% of your entire holdings per trade.

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