Markets are Always the Same

Yes, markets are always the same, they keep on changing.

Markets usually maintain, what I call, their fingerprint. This fingerprint is related to the way it trades, its' rhythm, its' style. This is I think, because the people or types of people who trade them are the same and have the same objectives day in and day out.

But, and there's always a "but", every now and then the tiger changes its stripes. Sometimes slowly, sometimes quickly, sometimes temporarily and sometimes permanently.

Last year we had the temporary leap in volatility, now we seem to have a move of the action eastwards. If you look at the charts today, again there was a good move that began at about 01:40 am London time and finished at about 07:48.

The point of this post is a lesson to Kiki to not be complacent. As information processors, our job is to process all information including what happens, what doesn't happen and what changes. Our methodology needs to be robust enough to deal with all these changes without us having to rebuild it. This is not to say that our targets and stop losses do not change because they do, in line with volatility or because testing some new ideas of money management shows we can improve profitability. But the trading method stays the same. As discretionary traders, we automatically look at different things and place a different weight on different pieces of information. This is normal and correct. As markets change, this process continues. But the trading method stays the same. Occasionally, very occasionally, I make a discovery that I incorporate into my methodology, but usually, I am trying to delete rather than add in a search for even more simplicity.

Trading the ES again.

 

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